In the past few years, many requests have come from regulators, policymakers, and practitioners asking for an overview of the different choices countries have made regarding microfinance regulation and supervision. Here, we create a "roadmap" outlining the possible regulatory and supervisory choices and examples for each type.
This typology centers around two important areas:
- Countries will need to decide how to regulate microfinance and whether new financial licenses need to be created.
- Countries will need to decide where to house the regulatory authority for microfinance, which can include responsibility for supervising these institutions.
The following matrix outlines these types and provides examples:
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Regulate the activity only |
Adapt an existing NBFI or cooperative license |
Create a new financial license | |
|
Regulatory authority housed within the government (e.g., Ministry of Finance) |
Deposit-taking: PARMEC | ||
|
Independent public regulator (e.g., central bank) |
Deposit-taking: Ghana, Indonesia (rural banks) Non-deposit-taking: Azerbaijan |
Tiered: Kyrgyzstan, Tajikistan Deposit-taking: Peru (CMAC, CRAC), Bolivia, Kenya, Pakistan, Uganda Non-deposit taking: Bosnia, Brazil, Peru (EDPYME), Nicaragua, Nepal | |
|
Hybrid regulator |
Deposit-taking: Indonesia (village credit institutions) |
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|
Self-regulation (from a member-owned body) |
Deposit-taking: Mexico |
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Laissez-faire |