In the News: Ongoing Regulatory Reform

Ongoing regulatory reform has been highlighted in a series of recent news articles worldwide. Find out what’s happening in Nepal, India, and Uganda.

Nepal is coming out with a new national micro-credit policy which also defines a regulatory environment for microfinance, as mentioned in this article July 5, 2005.

Uganda has awarded two new Micro Deposit-Taking Institution licenses, to Uganda Microfinance Union and to Pride Uganda.  In addition, the central bank issued a warning to other MFIs to immediately cease deposit-taking activity. 

>> Information on UMU’s license

>> The central bank warning

India has been abuzz lately with new plans for increasing access to commercial finance for MFIs.  The government has eased restrictions on external commercial borrowings, allowing some MFIs to begin accessing foreign sources of capital, which had been restricted since 2002.  The central bank will be producing a list of institutions eligible to access such funds.  The exemption allows MFIs to access funds up to US$5million. 

Finally, in the face of a lack of a regulatory environment, where very few MFIs have received a ‘stamp of approval’ from a regulatory authority, the National Bank for Agriculture and Rural Development has launched a new rating scheme with Indian rating firm CRISIL to offer MFI-rating services to commercial banks in order to encourage increased lending to MFIs.