Law and Microfinance: Harmonizing the Regulatory Regime
April 7, 2009 1 Comment
Yemen announced yesterday the passage of a law regulating the activities of microfinance banks. Many Latin America, Asian and African countries have already passed some form of regulatory regime for microfinance. In addition to regulatory regimes, there are also a number of transparency initiatives seeking to compel good behavior in microfinance institutions. In most cases these are intended to ward off corruption and to protect microfinance clients. This is good.
I’m concerned, however, that regulatory and transparency initiatives may hamper the work of MFIs, if they are not guided at minimum by a common logic. The goal would be to harmonize national regulations and international transparency initiatives so that microfinance institutions and funders could follow one set of “rules” to achieve compliance from one country to the next.
Easier said than done, no doubt. We are talking about regulatory mechanisms created by the national legislatures of each country and transparency initiatives created by independent nonprofits.
Is the conversation about harmonizing microfinance law already happening? Are the experts in microfinance regulation and oversight already connecting? Please send me information about any of the following:
- Groups working to harmonize national microfinance laws.
- Conferences or events that address these concerns.
- Law schools with programs or classes in microfinance.
- Legal scholars who focus on microfinance.
News and Commentary
The International Association of Insurance Supervisors is hosting its 16th Annual Conference in Brazil this year and is devoting the proceedings to the general topic of “Insurance as a Means of Socio-Economic Development”. This should provide a forum for insurance regulators from jurisdictions across the globe to interact and coordinate their efforts as respects the applicability of risk transfer to the vast market at the bottom of the period. While the term “microinsurance” does not appear to be mentioned explicitly on the event synopsis, I am certain it will be a primary topic of conversation at the event.