Global Microscope on the Microfinance Business Environment 2011

Supported by

Publication Date: October 2011

OVERALL AND CATEGORY RANKINGS

OVERALL SCORE
COUNTRY HIGHLIGHT REGION FILTER REGION HIGHLIGHT 1 2 3 4 5 6 7 8 9 =10 =10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 =27 =27 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 =49 =49 51 52 53 54 55 Peru Bolivia Pakistan Kenya El Salvador Philippines Colombia Ecuador Uganda Mexico Panama Paraguay Cambodia Brazil Rwanda Chile Tanzania Honduras Ghana Dominican Republic Kyrgyz Republic Armenia Uruguay Mozambique Nigeria Georgia Bosnia India Nicaragua Mongolia Tajikistan Costa Rica Indonesia Guatemala Azerbaijan Madagascar Morocco Lebanon China Senegal Cameroon Egypt Bangladesh Yemen Jamaica Argentina Dem. Rep. of Congo Sri Lanka Haiti Turkey Nepal Venezuela Trinidad and Tobago Thailand Vietnam 67.8 64.7 62.8 60.3 58.8 58.5 56.0 55.1 53.7 53.6 53.6 53.3 50.9 49.2 48.6 46.8 46.5 46.3 46.2 46.1 45.2 45.1 44.4 43.9 43.4 43.3 43.1 43.1 42.3 41.8 41.1 39.7 39.2 39.0 38.6 37.0 33.7 33.5 32.0 31.8 31.6 31.4 30.9 30.1 29.1 28.8 28.5 27.4 26.6 26.6 26.1 25.1 21.8 21.1 19.7

Regulatory Framework Practices

=1 =1 =1 =4 =4 =4 =7 =7 =7 =10 =10 =10 =10 =10 =10 =16 =16 =16 =16 =16 =16 =22 =22 =22 =22 =22 =22 =22 =22 =30 =30 =30 =30 =30 =30 =30 =37 =37 =37 =37 =37 =42 =42 =42 =42 =42 =42 =48 =48 =50 =50 =50 =50 54 55

Overall and category scores 0-100 where 100=best

Overall score for each country is calculated as the weighted sum of the "Regulatory Framework and Practices" and "Supporting Institutional Framework" category scores, reduced by the adjustment factor. The adjustment factor is based on each country's Stability score and represents a combined assessment of the likelihood and potential impact that political shocks or weak governance could have on the Microfinance environment.

Regulatory Framework and Practices

Pakistan Philippines Uganda Cambodia Kenya Peru Bolivia El Salvador Madagascar Ecuador Kyrgyz Republic Mongolia Paraguay Rwanda Tanzania Colombia Honduras Mexico Mozambique Panama Tajikistan Azerbaijan Brazil China Dominican Republic Georgia Ghana India Nigeria Cameroon Costa Rica Guatemala Indonesia Nicaragua Senegal Yemen Bangladesh Bosnia Chile Dem. Rep. of Congo Uruguay Armenia Egypt Haiti Lebanon Morocco Nepal Sri Lanka Vietnam Argentina Jamaica Thailand Turkey Venezuela Trinidad and Tobago 75.0 75.0 75.0 70.0 70.0 70.0 65.0 65.0 65.0 60.0 60.0 60.0 60.0 60.0 60.0 55.0 55.0 55.0 55.0 55.0 55.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 45.0 45.0 45.0 45.0 45.0 45.0 45.0 40.0 40.0 40.0 40.0 40.0 35.0 35.0 35.0 35.0 35.0 35.0 30.0 30.0 25.0 25.0 25.0 25.0 20.0 15.0

Supporting Institutional Framework

=1 =1 =3 =3 =5 =5 =5 =5 =5 =5 =5 =12 =12 =12 =12 =12 =17 =17 =17 =20 =20 =20 =20 =20 =25 =25 =25 =25 =25 =25 =25 =25 =25 =25 =25 =25 =25 =25 =39 =39 =39 =39 =39 =44 =44 =46 =46 =46 =46 =46 =46 =46 53 =54 =54 Bolivia Peru Armenia Colombia Chile Ecuador El Salvador Kenya Mexico Pakistan Panama Bosnia Brazil Nicaragua Paraguay Uruguay Dominican Republic Ghana Philippines Georgia Honduras India Nigeria Rwanda Argentina Cambodia Costa Rica Egypt Guatemala Indonesia Jamaica Kyrgyz Republic Lebanon Morocco Mozambique Tanzania Uganda Venezuela Azerbaijan Sri Lanka Tajikistan Trinidad and Tobago Turkey Bangladesh Mongolia Cameroon Dem. Rep. of Congo Haiti Nepal Senegal Thailand Yemen China Madagascar Vietnam 70.0 70.0 60.0 60.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 50.0 50.0 50.0 50.0 50.0 45.0 45.0 45.0 40.0 40.0 40.0 40.0 40.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 30.0 30.0 30.0 30.0 30.0 25.0 25.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 15.0 10.0 10.0

Adjustment Factor: Stability

1 =2 =2 4 =5 =5 =7 =7 =7 =7 =7 =12 =12 =12 =12 =16 =16 =16 =16 =16 =21 =21 =21 =21 =21 =21 =27 =27 =27 =27 =31 =31 =31 =31 =31 =36 =36 =36 =36 =40 =40 =40 =40 =40 45 =46 =46 48 =49 =49 51 52 =53 =53 55 Costa Rica Chile Uruguay Brazil El Salvador Indonesia Colombia Jamaica Mexico Panama Trinidad and Tobago Ghana Guatemala Mongolia Tanzania Dominican Republic Honduras Mozambique Peru Turkey Argentina China Paraguay Philippines Rwanda Vietnam Bosnia Morocco Senegal Uganda Armenia Bolivia Kenya Nigeria Pakistan Cameroon Ecuador Georgia Lebanon Azerbaijan Cambodia Haiti India Tajikistan Madagascar Bangladesh Kyrgyz Republic Venezuela Nepal Thailand Dem. Rep. of Congo Sri Lanka Egypt Nicaragua Yemen 92.5 90.0 90.0 87.5 82.5 82.5 80.0 80.0 80.0 80.0 80.0 77.5 77.5 77.5 77.5 75.0 75.0 75.0 75.0 75.0 72.5 72.5 72.5 72.5 72.5 72.5 70.0 70.0 70.0 70.0 67.5 67.5 67.5 67.5 67.5 65.0 65.0 65.0 65.0 62.5 62.5 62.5 62.5 62.5 57.5 47.5 47.5 45.0 42.5 42.5 40.0 30.0 17.5 17.5 5.0

Adjustment factor
-1.88% -2.50% -2.50% -3.13% -4.38% -4.38% -5.00% -5.00% -5.00% -5.00% -5.00% -5.63% -5.63% -5.63% -5.63% -6.25% -6.25% -6.25% -6.25% -6.25% -6.88% -6.88% -6.88% -6.88% -6.88% -6.88% -7.50% -7.50% -7.50% -7.50% -8.13% -8.13% -8.13% -8.13% -8.13% -8.75% -8.75% -8.75% -8.75% -9.38% -9.38% -9.38% -9.38% -9.38% -10.63% -13.13% -13.13% -13.75% -14.38% -14.38% -15.00% -17.50% -20.63% -20.63% -23.75%

2011 RANK COMPARED WITH 2010 RANK

Tables show country rank for Overall score in 2011 scorecard and 2010 scorecard (at default weighting)
NB 2010 scores not directly comparable to 2011 due to change in indicator components. 2011 ranks calculated excluding Egypt as this country was not present in 2010 scorecard.

IMPROVED RANK
Uruguay Mongolia Rwanda Mexico Brazil Lebanon Mozambique Indonesia Morocco Jamaica Panama Tanzania Kenya Bosnia Azerbaijan Cambodia Nigeria Paraguay Senegal Venezuela Colombia Pakistan Uganda Bolivia Dem. Rep. of Congo El Salvador Trinidad and Tobago

2011 23 30 15 10 14 38 24 33 37 44 10 17 4 27 35 13 25 12 40 51 7 3 9 2 46 5 52

2010 Change 46 44 29 23 26 49 34 41 45 51 17 24 10 32 38 16 28 15 43 54 9 5 11 3 47 6 53

LOWER RANK
India Nicaragua Yemen Ghana Guatemala Nepal Bangladesh Kyrgyz Republic Argentina Haiti Tajikistan Cameroon Georgia Madagascar Sri Lanka Philippines Costa Rica Thailand Chile Ecuador Vietnam China

2011 27 29 43 19 34 50 42 21 45 48 31 41 26 36 47 6 32 53 16 8 54 39

2010 8 13 27 4 19 35 33 12 37 40 25 36 21 31 42 2 29 50 14 6 52 38

Change

+23 +14 +14 +13 +12 +11 +10 +8 +8 +7 +7 +7 +6 +5 +3 +3 +3 +3 +3 +3 +2 +2 +2 +1 +1 +1 +1

-19 -16 -16 -15 -15 -15 -9 -9 -8 -8 -6 -5 -5 -5 -5 -4 -3 -3 -2 -2 -2 -1

efault weighting)

NO CHANGE
Armenia Dominican Republic Honduras Peru Turkey

2011 22 20 18 1 48

2010 22 20 18 1 48

Change 0 0 0 0 0

CATEGORY RANKING
COUNTRY HIGHLIGHT

OVERALL SCORE
Calculated score 0-100 (100=best)
Weighted sum of category scores

REGION FILTER

Rank 1 Peru 2 Bolivia 3 Pakistan

Score / 100 67.8 64.7 62.8 60.3 58.8 58.5 56.0 55.1 53.7 53.6 53.6 53.3 50.9 49.2 48.6 46.8 46.5 46.3 46.2 46.1 45.2 45.1 44.4 43.9 43.4 43.3 43.1 43.1

REGION HIGHLIGHT

SELECT INDICATOR

4 Kenya 5 El Salvador 6 Philippines 7 Colombia 8 Ecuador 9 Uganda =10 Mexico =10 Panama 12 Paraguay 13 Cambodia 14 Brazil 15 Rwanda 16 Chile 17 Tanzania 18 Honduras 19 Ghana 20 Dominican Republic 21 Kyrgyz Republic 22 Armenia 23 Uruguay 24 Mozambique 25 Nigeria 26 Georgia =27 Bosnia =27 India

10

20

100 (100=best)

Rank 29 Nicaragua 30 Mongolia 31 Tajikistan 32 Costa Rica 33 Indonesia 34 Guatemala 35 Azerbaijan 36 Madagascar 37 Morocco 38 Lebanon 39 China 40 Senegal 41 Cameroon 42 Egypt 43 Bangladesh 44 Yemen 45 Jamaica 46 Argentina 47 Dem. Rep. of Congo 48 Sri Lanka =49 Haiti =49 Turkey 51 Nepal 52 Venezuela 53 Trinidad and Tobago 54 Thailand 55 Vietnam

Score / 100 42.3 41.8 41.1 39.7 39.2 39.0 38.6 37.0 33.7 33.5 32.0 31.8 31.6 31.4 30.9 30.1 29.1 28.8 28.5 27.4 26.6 26.6 26.1 25.1 21.8 21.1 19.7

Regional Averages All countries Africa All Asia East Asia Eastern Europe and Central Asia Latin America and the Caribbean Middle East and North Africa South Asia

Score / 100 41.5 42.9 37.8 37.6 40.4 45.1 32.2 38.0

30

40

50

60

70

80

90

100

INDICATOR SCORES
COUNTRY HIGHLIGHT REGION FILTER

Regulatory Framework and Practices :: Regulation and sup

Are regulations and supervision in the country co

REGION HIGHLIGHT SELECT INDICATOR

No such regulations exist or regulations are prohibitive

1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

k and Practices :: Regulation and supervision of microcredit portfolios

nd supervision in the country conducive to microcredit provision by banks and other established financial institutions?

Regulations create serious obstacles

Regulations create at least two such obstacles for MFIs

Regulations create minor obstacles

Egypt Jamaica Sri Lanka Thailand Trinidad and Tobago Venezuela Vietnam

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0

Argentina Armenia Bangladesh Bosnia Brazil China Colombia Costa Rica Dominican Republic Dem. Rep. of Congo Ecuador El Salvador Haiti Honduras Lebanon Morocco Mozambique Nepal Nicaragua Senegal Turkey Uruguay Yemen

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0

Azerbaijan Bolivia Cameroon Chile Georgia Ghana Guatemala India Indonesia Kyrgyz Republic Madagascar Mexico Mongolia Nigeria Pakistan Panama Paraguay Peru Rwanda Tajikistan Tanzania

1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

tablished financial institutions?

Regulations present no significant obstacles

Cambodia Kenya Philippines Uganda

INDICATOR RANKING
COUNTRY HIGHLIGHT REGION FILTER

OVERALL SCORE
Rating 0-100 (100=best)
Weighted sum of category scores

REGION HIGHLIGHT Rank SELECT INDICATOR 1 Peru 2 Bolivia 3 Pakistan 4 Kenya 5 El Salvador 6 Philippines 7 Colombia 8 Ecuador 9 Uganda =10 Mexico =10 Panama 12 Paraguay 13 Cambodia 14 Brazil 15 Rwanda 16 Chile 17 Tanzania 18 Honduras 19 Ghana 20 Dominican Republic 21 Kyrgyz Republic 22 Armenia 23 Uruguay 24 Mozambique 25 Nigeria 26 Georgia =27 Bosnia =27 India 29 Nicaragua 30 Mongolia 31 Tajikistan 32 Costa Rica 33 Indonesia 34 Guatemala 35 Azerbaijan 36 Madagascar 37 Morocco 38 Lebanon Score / 100 67.8 64.7 62.8 60.3 58.8 58.5 56.0 55.1 53.7 53.6 53.6 53.3 50.9 49.2 48.6 46.8 46.5 46.3 46.2 46.1 45.2 45.1 44.4 43.9 43.4 43.3 43.1 43.1 42.3 41.8 41.1 39.7 39.2 39.0 38.6 37.0 33.7 33.5

39 China 40 Senegal 41 Cameroon 42 Egypt 43 Bangladesh 44 Yemen 45 Jamaica 46 Argentina 47 Dem. Rep. of Congo 48 Sri Lanka =49 Haiti =49 Turkey 51 Nepal 52 Venezuela 53 Trinidad and Tobago 54 Thailand 55 Vietnam

32.0 31.8 31.6 31.4 30.9 30.1 29.1 28.8 28.5 27.4 26.6 26.6 26.1 25.1 21.8 21.1 19.7

cores

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COUNTRY PROFILE
SELECT COUNTRY

SELECT INDICATOR

Argentina
SCORECARD OVERALL SCORE Regulatory Framework and Practices Regulation and supervision of microcredit portfolios Formation of regulated/supervised microcredit institutions Formation/operation of non-regulated microcredit institutions Regulatory and supervisory capacity for microfinance Regulatory framework for deposit-taking Supporting Institutional Framework Accounting transparency Client Protection: Transparency in pricing Client Protection: Dispute resolution Credit bureaus Policy and practice for financial transactions through agents Adjustment Factor: Stability Political shock to microfinance Political stability REGULATION AND SUPERVISION OF MICROCREDIT PORTFOLIOS
The Superintendency of Financial Institutions of the Banco Central de la Repblica Argentina (BCRA, the Central Bank) is the main formal regulator for the overall financial system. Microfinance was until recently a completely non-regulated industry; institutions operating within it are either Sociedades Annimas (SAs, limited companies) or non-governmental organisations (NGOs). Existing institutions, such as banks or NGOs, may form SAs, which can operate as non-regulated institutions allowed to provide credit and are subject to lower taxation. However, in December 2008 a Central Bank circular took important first steps toward regulating microcredit. It recognised the activity for the first time, allowed banks to grant microcredit directly to clients rather than through formation of another SA and permitted banks to hold up to 100% of the shares in an SA. It also allowed and explicitly differentiated banks efforts to provide second-tier funding to microfinance institutions (as opposed to other, nonmicrofinance institutions), ultimately easing conditions for banks to lend money to non-regulated microfinance institutions (NGOs and SAs). Finally, the circular even enabled NGOs and SAs to raise funds on capital markets to facilitate funding. While immediate impacts were somewhat obscured by the global recession and a general tightening of liquidity in the countrys banking system, evidence is mounting of positive, if not overwhelming, impacts. Banks have slowly increased their presence in the sector (such as Banco de Provincia with its new microfinance unit) and greater access to non-public funding is now available for NGO MFIs, as several domestic and foreign banks have opened or expanded on-lending to NGO MFIs. Documentation requirements were also eased by the 2008 circular, and capital-adequacy standards generally do not apply, since SAs are non-prudentiallyregulated, and in any event are considered adequate. Still, the circulars definition of microcredit is seen by some as too broad and banks still face a labour contracts burden that prevents personnel from working outside branches (which some circumvent by setting up as Sociedades Comerciales (SCs), which have more labour flexibility) and high indirect labour costs, given social charges. Although public institutions are in principle second-tier and there are no floors or ceilings on interest rates, they introduce distortion into market interest rates and competition by requiring institutions to which they on-lend to apply administratively determined rates (currently 6%) and also by offering concessional rates in loans from government programmes that can be as low as one-quarter of those charged commercially. The state also injects competitive distortion by offering financing to non-profit organisations at a subsidized rate, on the condition that that institution offers microcredit at a capped rate, which is often at a level that does not cover operating costs for these organisations. There is no general cap on interest rates, although rates tend to be high (at between 40-80% per annum), reflecting the high cost of credit in an inflationary economy. A high tax burden (such as a tax on banking operations for internal administration) also remains onerous, as well as provincial-level restrictions on the share of capital that may be held by foreign institutional investors (first adopted in 2005 at 4% by Ciudad Autnoma de Buenos Aires and since emulated by other provinces). (Banco Central, December 2010; Personal interviews: June 2011) Rank / 55 Score / 100

46 =50 =26 =42 =38 =33 =50 =25 =22 =34 =6 =11 =45 =21 =1 =23

28.8 25.0 50.0 25.0 25.0 25.0 0.0 35.0 50.0 25.0 50.0 50.0 0.0 72.5 100.0 45.0

inflationary economy. A high tax burden (such as a tax on banking operations for internal administration) also remains onerous, as well as provincial-level restrictions on the share of capital that may be held by foreign institutional investors (first adopted in 2005 at 4% by Ciudad Autnoma de Buenos Aires and since emulated by other provinces). (Banco Central, December 2010; Personal interviews: June 2011)

PERFORMANCE INDICATORS
FINANCIAL PERFORMANCE Return on Assets (Weighted average) Return on Assets (Median) OUTREACH Portfolio size, US$ Average loan balance as a % of GNI per capita Y-O-Y growth in number of borrowers Growth on GLP DEPOSITS Number of deposit accounts Loan/deposit ratio Average deposit balance, US$ Growth on deposits Average deposit account balance / GNI per capita EFFICIENCY Borrowers per staff member Cost per loan, US$ Cost per borrower, US$ RISK Portfolio at risk > 30 days Percent of write-offs

-2.8% -15.2% 779,936 5.4% 17.9% 46.8% 0 3.9 32.7%

64.4 312.4 352.0 5.2% 2.03%

* Data provided by MIX market. ** Except for the weighted average of the ROA, all data is calculated as the median.

COUNTRY DETAIL

SELECT COUNTRY

Argentina
Regulatory Framework and Practices
Regulation and supervision of microcredit portfolios

Data

Regulations create at least two such obstacles for MFIs

Formation of regulated/supervised microcredit institutions

Regulations exist but multiple obstacles make formation very difficult

Formation/operation of non-regulated microcredit institutions

Unregulated institutions face many obstacles to establishing operations;

Regulatory and supervisory capacity for microfinance

Limited capacity to regulate and supervise;

Regulatory framework for deposit-taking

Regulated institutions may not take deposits;

Supporting Institutional Framework

Accounting transparency

National standards exist but are adhered to by only some institutions

Client Protection: Transparency in pricing

Regulations are technically in place but they are not followed or enforced;

Client Protection: Dispute resolution

A mechanism for dispute resolution exists, but it does not work well in practice (e.g. it is too costly, time-consuming, unfair, or is only available to a limited number of potential users); Credit bureaus

Credit bureaus are weak in some of these ways;

Policy and practice for financial transactions through agents

The environment is not conducive and there are no existing agent mechanisms in the country;

Adjustment Factor: Stability

Political shock to microfinance

The country has been free of any political developments affecting microfinance operations Political stability

55

LECT COUNTRY Long text notes are abridged, double click an indicator, or click the button below to view full text. MACROS must be enabled.

Notes

The Superintendency of Financial Institutions of the Banco Central de la Repblica Argentina (BCRA, the Central Bank) is the main formal regulator for the overall financial system. Microfinance was until recently a completely non-regulated industry; institutions operating within it are either Sociedades Annimas (SAs, limited companies) or non-governmental organisations (NGOs). Existing institutions, such as banks or NGOs, may form SAs, which can operate as non-regulated institutions allowed to provide credit and are subject to lower taxation. However, in December 2008 a Central Bank circular

There are no specialised juridical vehicles for microfinance in Argentina, although the limited company form, unregulated by theCentral Bank, has been used for microfinance purposes by both downscaling banks and NGOs. Although credit co-operatives were created by a September 2007 law as a means to channel credit to micro, small and medium-sized enterprises (and one that could also capture deposits from members), only two had been authorised by the Central Bank as of September 2009 and apparently none with any significant microfinance presence. The vehicle appears unattractive to NGOs and SAs s

Administratively, forming an NGO can take up to one year. Each province has its own authority that registers NGOs. Although it is not difficult to establish a non-regulated institution that offers microfinance services, and while NGOs can set market interest rates (subject to the loose caps specified in the first indicator) they face competition from SAs that receive second-tier public loans that require them to fix their interest rates (6% currently) and that also access their own, more limited line of second-tier public on-lending, which comes with similarly problematic interest rate caps. N

Specialised expertise and methodologies for microfinance have generally been lacking and five government entities compete with each other in shaping the industry in practice: the Central Bank/Financial Superintendency; the Ministry of Finance (which has a second-tier funding programme for SAs); the General Inspectorate of Justice of the Ministry of Justice (which regulates the formation and organisationbut not the financesof SAs and NGOs); FONCAP, a public-private enterprise; and the Ministry of Social Development (which has a second-tier funding scheme for NGO-MFIs). This creates considerab

Institutions operating in microfinance are not allowed to capture deposits of any type, and at present, there is no distinction made between the traditional saver and potential microfinance savers, so this reduces the possibilities of increasing the capacity for microfinance institutions to capture deposits. There is no legal minimum deposit requirement for banks, the problem is that the costs of maintaining an account are not offset by the remuneration of the account for a consumer. This means that for a saver, a deposit essentially ends up having a "negative" impact. There may well be a modi

There is a large gap between the standards followed by regulated (non-microfinance) institutions and MFIs (mostly NGOs and SAs), which are nonregulated and have laxer norms and practices. Commercial organisations must submit annual audited accounts under local standards (which are not yet aligned to international standards). This information must be submitted to tax and corporation regulators in the country. Non-regulated organisations are not subject to auditing standards, aside from those that operate with the aid of international funding, of which in Argentina there are few. The Buenos Air

There is no requirement to publish effective rates, and practices are very uneven. The RADIM network reports that its SA and NGO members divulge rates clearly in loan agreements. External audits have begun to appear with more frequency, however, owing to pressure from international funders and selfregulation through MFI networks, such as RADIM, who have been by holding conferences to promote the Transparent Pricing Initiative in Argentina. However, there is less clarity with respect to fees charged by microfinance institutions. Financial institutions do have a requirement to clearly publish f

There is no specific regulatory framework in place that may allow a regulation such as the Consumer Protection Act to be a tool for borrower protection. As such, in Argentina, disputes are resolved in the courts, with all the time and money that may entail for a borrower. However, the legal framework currently favours the borrower, and a private mediation process must be completed before going to court. The number of cases that reach the court are quite low and there is a large percentage of dispute cases that are resolved before they reach court. (Personal interviews, June 2011)

The country has 26 private bureaus, plus a public registry, but none is specific to microfinance. Most of the data come from the formal financial system, are often outdated, and are consequently of limited utility, although lately some improved information from small-scale consumer lending has become available. The market in Argentina is not yet as developed in terms of the issue of monitoring indebtedness, a situation that occurs frequently among microfinance institutions. There is no developed credit bureau (there is incipient negative information exchanged between 3 or 4 institutions) to an

Argentina is still behind in the use of technology applied to microcredit. What have been used in recent years are the services of collection agents, to increase the points and times in which customers can make their payments. There is still no development in terms of offering microcredit through mobile phone or wireless means and there is, as yet, no innovative channel of development for microfinance. The market for microfinance in Argentina is still quite underdeveloped; committing time and resources to making it more sophisticated is not currently a priority for the regulator or the financ

Although access to financing remains a weakness, there are no special circumstances that could generate extreme tension in the short term. Despite the general lack of regulatory oversight for microfinance in Argentina, there is no sign of any demand-side movement that may have an adverse effect on development of the industry. Continued commitment to expansionary macroeconomic policies for political reasons, despite the significant economic distortions these have created, create some risk of producing a loss of confidence and renewed capital flight. The election in October 2011 should be orderl

COUNTRY COMPARISON

COMPARE

WITH

Argentina OVERALL SCORE REGULATORY FRAMEWORK AND PRACTICES Regulation and supervision of microcredit portfolios Formation of regulated/supervised microcredit institutions Formation/operation of non-regulated microcredit institutions Regulatory and supervisory capacity for microfinance Regulatory framework for deposit-taking SUPPORTING INSTITUTIONAL FRAMEWORK Accounting transparency Client Protection: Transparency in pricing Client Protection: Dispute resolution Credit bureaus Policy and practice for financial transactions through agents ADJUSTMENT FACTOR: STABILITY Political shock to microfinance Political stability 28.8 25.0 50.0 25.0 25.0 25.0 0.0 35.0 50.0 25.0 50.0 50.0 0.0 72.5 100.0 45.0

Argentina 28.8 25.0 50.0 25.0 25.0 25.0 0.0 35.0 50.0 25.0 50.0 50.0 0.0 72.5 100.0 45.0

PERFORMANCE INDICATORS FINANCIAL PERFORMANCE Return on Assets (Weighted average) Return on Assets (Median) OUTREACH Portfolio size, US$ Average loan balance as a % of GNI per capita Y-O-Y growth in number of borrowers Growth on GLP DEPOSITS Number of deposit accounts Loan/deposit ratio Average deposit balance, US$ Growth on deposits Average deposit account balance / GNI per capita EFFICIENCY Borrowers per staff member Cost per loan, US$ Cost per borrower, US$ RISK Portfolio at risk > 30 days Percent of write-offs

Argentina -2.8% -15.2%

Argentina -2.8% -15.2%

779,936 0.1 17.9% 46.8%

779,936 0.1 17.9% 46.8%

0 3.9

0 3.9

32.7%

32.7%

64.4 312.4 352.0

64.4 312.4 352.0

5.2% 2.0%

5.2% 2.0%

SCATTER CHART
COUNTRY HIGHLIGHT

OVERALL SCORE
Rating 0-100 (100=best)

Regulation and supervision of microcredit

REGION FILTER

Rating 0-4 (4=best)

REGION HIGHLIGHT

CORRELATION(X,Y)
4.5

0.66

SELECT X-AXIS INDICATOR

Regulation and supervision of microcredit portfolios

3.5

2.5

SELECT Y-AXIS INDICATOR

1.5

0.5
Show country labels (for highighted region) Show outliers (blue dots)

0 0 10

pervision of microcredit portfolios

Cambodia

El Salvador

20

30

40 OVERALL SCORE

50

60

70

80

A note on the number of borrowers data: Data for the number of microfinance borrowers comes from MIX market, while data for the number of self-employed is obtained from the Multilateral Investment Fund household surveys. The selfemployed data is used as a proxy for the number of microenterprises and thus represents the total market potential in a given country. This data is only available for LAC countries. All borrower and microenterprise data proxies are for 2010 or the latest available year.

WEIGHTS
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CATEGORY WEIGHTS Regulatory Framework and Practices Supporting Institutional Framework INDICATOR WEIGHTS Regulatory Framework and Practices Regulation and supervision of microcredit portfolios Formation of regulated/supervised microcredit institutions Formation/operation of non-regulated microcredit institutions Regulatory and supervisory capacity for microfinance Regulatory framework for deposit-taking Supporting Institutional Framework Accounting transparency Client Protection: Transparency in pricing Client Protection: Dispute resolution Credit bureaus Policy and practice for financial transactions through agents

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NORMALISED SCORES
All scores 0-100 where 100=best

WEIGHT 1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 3 3.1 3.2 OVERALL SCORE REGULATORY FRAMEWORK AND PRACTICES Regulation and supervision of microcredit portfolios Formation of regulated/supervised microcredit institutions Formation/operation of non-regulated microcredit institutions Regulatory and supervisory capacity for microfinance Regulatory framework for deposit-taking SUPPORTING INSTITUTIONAL FRAMEWORK Accounting transparency Client Protection: Transparency in pricing Client Protection: Dispute resolution Credit bureaus Policy and practice for financial transactions through agents ADJUSTMENT FACTOR: STABILITY Political shock to microfinance Political stability STABILITY ADJUSTMENT FACTOR 50.0% 20.0% 20.0% 20.0% 20.0% 20.0% 50.0% 20.0% 20.0% 20.0% 20.0% 20.0% 50.0% 50.0%

Argentina 28.8 25.0 50.0 25.0 25.0 25.0 0.0 35.0 50.0 25.0 50.0 50.0 0.0 72.5 100.0 45.0 -6.88%

Armenia 45.1 35.0 50.0 50.0 0.0 75.0 0.0 60.0 75.0 75.0 50.0 75.0 25.0 67.5 100.0 35.0 -8.13%

Azerbaijan 38.6 50.0 75.0 75.0 0.0 50.0 50.0 30.0 75.0 25.0 0.0 25.0 25.0 62.5 100.0 25.0 -9.38%

Bangladesh 30.9 40.0 50.0 50.0 50.0 25.0 25.0 25.0 50.0 75.0 0.0 0.0 0.0 47.5 50.0 45.0 -13.13%

Bolivia 64.7 65.0 75.0 50.0 75.0 75.0 50.0 70.0 50.0 100.0 75.0 75.0 50.0 67.5 100.0 35.0 -8.13%

Bosnia 43.1 40.0 50.0 50.0 50.0 50.0 0.0 50.0 75.0 75.0 50.0 50.0 0.0 70.0 100.0 40.0 -7.50%

Brazil 49.2 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 87.5 100.0 75.0 -3.13%

Cambodia 50.9 70.0 100.0 75.0 50.0 50.0 75.0 35.0 75.0 75.0 0.0 0.0 25.0 62.5 100.0 25.0 -9.38%

Cameroon 31.6 45.0 75.0 50.0 25.0 25.0 50.0 20.0 50.0 25.0 0.0 0.0 25.0 65.0 100.0 30.0 -8.75%

Chile 46.8 40.0 75.0 25.0 50.0 25.0 25.0 55.0 75.0 50.0 75.0 50.0 25.0 90.0 100.0 80.0 -2.50%

China 32.0 50.0 50.0 50.0 25.0 50.0 75.0 15.0 50.0 0.0 0.0 25.0 0.0 72.5 100.0 45.0 -6.88%

Colombia 56.0 55.0 50.0 50.0 75.0 50.0 50.0 60.0 50.0 50.0 75.0 75.0 50.0 80.0 100.0 60.0 -5.00%

Costa Rica 39.7 45.0 50.0 50.0 50.0 25.0 50.0 35.0 25.0 50.0 50.0 50.0 0.0 92.5 100.0 85.0 -1.88%

Dominican Republic 46.1 50.0 50.0 50.0 75.0 25.0 50.0 45.0 50.0 50.0 25.0 75.0 25.0 75.0 100.0 50.0 -6.25%

Dem. Rep. of Congo 28.5 40.0 50.0 50.0 25.0 25.0 50.0 20.0 25.0 25.0 25.0 0.0 25.0 40.0 50.0 30.0 -15.00%

Ecuador 55.1 60.0 50.0 75.0 50.0 75.0 50.0 55.0 50.0 50.0 50.0 100.0 25.0 65.0 100.0 30.0 -8.75%

Egypt 31.4 35.0 25.0 25.0 50.0 50.0 25.0 35.0 50.0 25.0 25.0 50.0 25.0 17.5 0.0 35.0 -20.63%

El Salvador 58.8 65.0 50.0 75.0 75.0 50.0 75.0 55.0 75.0 50.0 50.0 75.0 25.0 82.5 100.0 65.0 -4.38%

Georgia 43.3 50.0 75.0 75.0 0.0 75.0 25.0 40.0 75.0 50.0 50.0 25.0 0.0 65.0 100.0 30.0 -8.75%

Ghana 46.2 50.0 75.0 50.0 50.0 25.0 50.0 45.0 50.0 25.0 50.0 25.0 75.0 77.5 100.0 55.0 -5.63%

Guatemala 39.0 45.0 75.0 25.0 50.0 25.0 50.0 35.0 75.0 25.0 0.0 50.0 25.0 77.5 100.0 55.0 -5.63%

Haiti 26.6 35.0 50.0 25.0 75.0 0.0 25.0 20.0 25.0 50.0 25.0 0.0 0.0 62.5 100.0 25.0 -9.38%

Honduras 46.3 55.0 50.0 50.0 75.0 50.0 50.0 40.0 50.0 50.0 25.0 50.0 25.0 75.0 100.0 50.0 -6.25%

India 43.1 50.0 75.0 50.0 50.0 50.0 25.0 40.0 50.0 50.0 0.0 50.0 50.0 62.5 50.0 75.0 -9.38%

Indonesia 39.2 45.0 75.0 25.0 50.0 25.0 50.0 35.0 75.0 25.0 25.0 25.0 25.0 82.5 100.0 65.0 -4.38%

Jamaica 29.1 25.0 25.0 25.0 25.0 25.0 25.0 35.0 75.0 25.0 50.0 0.0 25.0 80.0 100.0 60.0 -5.00%

Kenya 60.3 70.0 100.0 75.0 75.0 50.0 50.0 55.0 75.0 50.0 50.0 25.0 75.0 67.5 100.0 35.0 -8.13%

Kyrgyz Republic 45.2 60.0 75.0 50.0 100.0 50.0 25.0 35.0 50.0 25.0 25.0 50.0 25.0 47.5 50.0 45.0 -13.13%

Lebanon 33.5 35.0 50.0 50.0 50.0 25.0 0.0 35.0 50.0 50.0 50.0 0.0 25.0 65.0 100.0 30.0 -8.75%

Madagascar 37.0 65.0 75.0 75.0 75.0 25.0 75.0 10.0 25.0 0.0 0.0 25.0 0.0 57.5 100.0 15.0 -10.63%

Mexico 53.6 55.0 75.0 50.0 50.0 50.0 50.0 55.0 75.0 75.0 50.0 50.0 25.0 80.0 100.0 60.0 -5.00%

Mongolia 41.8 60.0 75.0 50.0 25.0 75.0 75.0 25.0 25.0 50.0 25.0 0.0 25.0 77.5 100.0 55.0 -5.63%

Morocco 33.7 35.0 50.0 75.0 0.0 50.0 0.0 35.0 75.0 0.0 0.0 75.0 25.0 70.0 100.0 40.0 -7.50%

Mozambique 43.9 55.0 50.0 50.0 75.0 50.0 50.0 35.0 50.0 50.0 25.0 25.0 25.0 75.0 100.0 50.0 -6.25%

Nepal 26.1 35.0 50.0 75.0 25.0 0.0 25.0 20.0 25.0 50.0 0.0 0.0 25.0 42.5 50.0 35.0 -14.38%

Nicaragua 42.3 45.0 50.0 50.0 50.0 50.0 25.0 50.0 75.0 75.0 25.0 50.0 25.0 17.5 0.0 35.0 -20.63%

Nigeria 43.4 50.0 75.0 50.0 50.0 25.0 50.0 40.0 25.0 50.0 50.0 25.0 50.0 67.5 100.0 35.0 -8.13%

Pakistan 62.8 75.0 75.0 75.0 50.0 100.0 75.0 55.0 75.0 75.0 50.0 25.0 50.0 67.5 100.0 35.0 -8.13%

Panama 53.6 55.0 75.0 50.0 50.0 50.0 50.0 55.0 75.0 50.0 50.0 75.0 25.0 80.0 100.0 60.0 -5.00%

Paraguay 53.3 60.0 75.0 50.0 75.0 50.0 50.0 50.0 50.0 50.0 75.0 50.0 25.0 72.5 100.0 45.0 -6.88%

Peru 67.8 70.0 75.0 75.0 50.0 100.0 50.0 70.0 75.0 75.0 50.0 75.0 75.0 75.0 100.0 50.0 -6.25%

Philippines 58.5 75.0 100.0 75.0 50.0 75.0 75.0 45.0 50.0 50.0 50.0 25.0 50.0 72.5 100.0 45.0 -6.88%

Rwanda 48.6 60.0 75.0 75.0 50.0 50.0 50.0 40.0 25.0 25.0 50.0 50.0 50.0 72.5 100.0 45.0 -6.88%

Senegal 31.8 45.0 50.0 50.0 25.0 50.0 50.0 20.0 25.0 25.0 25.0 0.0 25.0 70.0 100.0 40.0 -7.50%

Sri Lanka 27.4 30.0 25.0 50.0 50.0 0.0 25.0 30.0 25.0 25.0 25.0 25.0 50.0 30.0 0.0 60.0 -17.50%

Tajikistan 41.1 55.0 75.0 75.0 25.0 50.0 50.0 30.0 75.0 50.0 0.0 0.0 25.0 62.5 100.0 25.0 -9.38%

Tanzania 46.5 60.0 75.0 25.0 100.0 50.0 50.0 35.0 75.0 25.0 25.0 0.0 50.0 77.5 100.0 55.0 -5.63%

Thailand 21.1 25.0 25.0 25.0 25.0 0.0 50.0 20.0 25.0 25.0 0.0 25.0 25.0 42.5 50.0 35.0 -14.38%

Trinidad and Tobago 21.8 15.0 25.0 0.0 25.0 0.0 25.0 30.0 50.0 25.0 0.0 75.0 0.0 80.0 100.0 60.0 -5.00%

Turkey 26.6 25.0 50.0 25.0 25.0 25.0 0.0 30.0 75.0 25.0 25.0 25.0 0.0 75.0 100.0 50.0 -6.25%

Uganda 53.7 75.0 100.0 75.0 50.0 75.0 75.0 35.0 50.0 50.0 25.0 25.0 25.0 70.0 100.0 40.0 -7.50%

Uruguay 44.4 40.0 50.0 25.0 25.0 50.0 50.0 50.0 50.0 50.0 75.0 50.0 25.0 90.0 100.0 80.0 -2.50%

Venezuela 25.1 20.0 25.0 25.0 0.0 25.0 25.0 35.0 75.0 50.0 25.0 0.0 25.0 45.0 50.0 40.0 -13.75%

Vietnam 19.7 30.0 25.0 25.0 50.0 25.0 25.0 10.0 25.0 25.0 0.0 0.0 0.0 72.5 100.0 45.0 -6.88%

Yemen 30.1 45.0 50.0 75.0 50.0 25.0 25.0 20.0 50.0 0.0 0.0 25.0 25.0 5.0 0.0 10.0 -23.75%

All countries 41.5 48.0 60.0 50.5 45.9 42.3 41.4 38.1 54.1 42.7 31.4 35.0 27.3 66.0 86.4 45.5

Africa 42.9 55.9 72.7 56.8 54.5 40.9 54.5 32.3 43.2 31.8 29.5 18.2 38.6 67.3 95.5 39.1

All Asia 37.8 48.8 60.4 52.1 41.7 39.6 50.0 29.6 45.8 43.8 14.6 16.7 27.1 61.0 75.0 47.1

East Asia 37.6 50.7 64.3 46.4 39.3 42.9 60.7 26.4 46.4 35.7 14.3 14.3 21.4 68.9 92.9 45.0

Eastern Europe 40.4 45.0 64.3 57.1 28.6 53.6 21.4 39.3 71.4 46.4 28.6 35.7 14.3 64.3 92.9 35.7

Latin America and the Caribbean 45.1 46.4 54.8 42.9 51.2 41.7 41.7 46.9 58.3 51.2 45.2 53.6 26.2 73.7 92.9 54.5

Middle East and North Africa 32.2 37.5 43.8 56.3 37.5 37.5 12.5 31.3 56.3 18.8 18.8 37.5 25.0 39.4 50.0 28.8

South Asia 38.0 46.0 55.0 60.0 45.0 35.0 35.0 34.0 45.0 55.0 15.0 20.0 35.0 50.0 50.0 50.0

INDICATOR DATA

1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 3 3.1 3.2

OVERALL SCORE REGULATORY FRAMEWORK AND PRACTICES Regulation and supervision of microcredit portfolios Formation of regulated/supervised microcredit institutions Formation/operation of non-regulated microcredit institutions Regulatory and supervisory capacity for microfinance Regulatory framework for deposit-taking SUPPORTING INSTITUTIONAL FRAMEWORK Accounting transparency Client Protection: Transparency in pricing Client Protection: Dispute resolution Credit bureaus Policy and practice for financial transactions through agents ADJUSTMENT FACTOR: STABILITY Political shock to microfinance Political stability

Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-4 (4=best) Rating 0-2 (0=best) Rating 0-100 (0=best) % % %

DP DEPENDENT VARIABLES DP1 Number of borrowers as % of population DP2 Number of borrowers as % of self-employed DP3 Number of borrowers as % of poor population BG PERFORMANCE INDICATORS FP FINANCIAL PERFORMANCE FP1 Return on Assets (Weighted average) FP2 Return on Assets (Median) OU OUTREACH OU1 Portfolio size, US$ OU2 Average loan balance as a % of GNI per capita OU3 Y-O-Y growth in number of borrowers OU4 Growth on GLP DE DEPOSITS DE1 Number of deposit accounts DE2 Loan/deposit ratio DE3 Average deposit balance, US$ DE4 Growth on deposits DE5 Average deposit account balance / GNI per capita EF EFFICIENCY EF1 Borrowers per staff member EF2 Cost per loan, US$ EF3 Cost per borrower, US$ RK RISK RK1 Portfolio at risk > 30 days RK2 Percent of write-offs

% % US$ % of GNI per capita % % accounts ratio US$ % 0 ratio US$ US$ % %

Argentina

Armenia

Azerbaijan

Bangladesh

Bolivia

Bosnia

Brazil

Cambodia

Cameroon

2.0 1.0 1.0 1.0 0.0 2.0 1.0 2.0 2.0 0.0 0.0 55.0 0.1 0.8 0.5

2.0 2.0 0.0 3.0 0.0 3.0 3.0 2.0 3.0 1.0 0.0 65.0 7.3 27.6

3.0 3.0 0.0 2.0 2.0 3.0 1.0 0.0 1.0 1.0 0.0 75.0 4.0 25.5

2.0 2.0 2.0 1.0 1.0 2.0 3.0 0.0 0.0 0.0 1.0 55.0 12.0 23.9

3.0 2.0 3.0 3.0 2.0 2.0 4.0 3.0 3.0 2.0 0.0 65.0 8.8 43.5 14.6

2.0 2.0 2.0 2.0 0.0 3.0 3.0 2.0 2.0 0.0 0.0 60.0 7.0 50.1

2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 0.0 25.0 0.5 8.1 2.3

4.0 3.0 2.0 2.0 3.0 3.0 3.0 0.0 0.0 1.0 0.0 75.0 8.7 28.8

3.0 2.0 1.0 1.0 2.0 2.0 1.0 0.0 0.0 1.0 0.0 70.0 0.6 1.5

-2.8% -15.2% 779,936 5.4% 17.9% 46.8% 0 3.9 32.7%

3.0% 3.4% 16,388,103 46.2% 21.6% 43.9% 0 2.0 1,403.8 18.3% 44.0% 81.4 159.1 159.1 1.0% 0.4%

4.4% 4.0% 4,494,493 23.9% 11.5% 24.9% 0 1.9 4,481.0 54.9% 92.0% 78.9 191.2 222.7 1.5% 0.0%

5.9% 2.2% 12,156,828 20.5% 6.7% 18.3% 151,752 2.9 27.4 16.2% 5.0% 126.2 15.3 15.4 6.6% 0.0%

2.0% 1.5% 34,084,684 105.2% 12.5% 26.7% 0 1.0 924.9 9.7% 53.0% 75.6 262.2 269.9 2.3% 0.7%

-1.3% -2.2% 28,716,361 31.9% -27.4% -29.7% 0 1.1 1,538.4 -16.2% 33.0% 117.7 211.8 220.8 10.9% 8.6%

4.6% 6.7% 4,184,589 14.1% 8.1% 38.7% 0 2.6 1,461.4 36.9% 18.0% 91.9 279.3 460.5 5.0% 1.4%

2.9% 2.9% 26,203,315 89.1% 9.7% 30.7% 3,286 13.8 89.2 23.3% 14.5% 75.4 98.8 104.4 1.0% 0.9%

0.8% 0.9% 5,632,906 76.5% 11.1% 50.5% 16,913 0.8 504.5 14.9% 43.0% 80.6 110.4 160.9 11.0% 0.5%

64.4 312.4 352.0 5.2% 2.0%

Chile

China

Colombia

Costa Rica

Dominican Republic

Dem. Rep. of Congo

Ecuador

Egypt

El Salvador

3.0 1.0 2.0 1.0 1.0 3.0 2.0 3.0 2.0 1.0 0.0 20.0 1.4 18.0 9.3

2.0 2.0 1.0 2.0 3.0 2.0 0.0 0.0 1.0 0.0 0.0 55.0 0.0 0.7

2.0 2.0 3.0 2.0 2.0 2.0 2.0 3.0 3.0 2.0 0.0 40.0 3.3 19.4 7.2

2.0 2.0 2.0 1.0 2.0 1.0 2.0 2.0 2.0 0.0 0.0 15.0 0.6 11.1 2.6

2.0 2.0 3.0 1.0 2.0 2.0 2.0 1.0 3.0 1.0 0.0 50.0 3.7 15.2 7.4

2.0 2.0 1.0 1.0 2.0 1.0 1.0 1.0 0.0 1.0 1.0 70.0 0.1 0.3

2.0 3.0 2.0 3.0 2.0 2.0 2.0 2.0 4.0 1.0 0.0 70.0 4.9 24.5 13.7

1.0 1.0 2.0 2.0 1.0 2.0 1.0 1.0 2.0 1.0 2.0 65.0 0.8 3.6

2.0 3.0 3.0 2.0 3.0 3.0 2.0 2.0 3.0 1.0 0.0 35.0 2.7 26.4 7.2

0.1% -13.4% 12,868,453 8.7% 9.5% 44.3% 6,225 3.2 379.8 50.9% 5.0% 133.8 213.7 219.5 5.6% 3.0%

1.9% 2.1% 4,501,361 49.0% 8.8% 19.8% 0 13.2 21.2 -56.4% 0.0% 42.6 65.6 81.3 0.8% 0.0%

2.5% 2.0% 15,071,048 22.6% 10.9% 27.3% 0 1.5 500.8 47.0% 11.0% 122.7 181.4 204.5 4.5% 2.1%

0.3% 2.8% 1,606,349 23.0% 7.1% 19.5% 0 0.0 25.7 46.7% 0.0% 73.0 204.5 236.8 4.9% 0.0%

2.3% 2.6% 7,280,007 8.8% 15.2% 16.3% 5,437 2.2 354.9 -3.0% 7.5% 88.2 158.5 162.3 4.0% 1.3%

-0.3% 0.2% 1,955,427 130.0% 5.5% 31.7% 13,213 1.4 187.5 27.9% 109.5% 145.1 112.2 112.2 1.2% 1.8%

1.4% 1.4% 7,031,647 35.6% 16.6% 41.6% 9,550 1.2 367.2 31.0% 9.5% 131.9 188.8 197.4 2.9% 0.4%

11.8% 8.4% 7,279,267 8.1% 9.8% 9.2% 0 8.0 32.5 8.8% 1.0% 156.3 27.3 27.3 2.3% 0.0%

-0.7% 0.9% 5,790,029 32.3% 3.9% 16.2% 0 1.0 658.9 21.8% 18.0% 75.3 224.6 233.3 9.4% 1.5%

Georgia

Ghana

Guatemala

Haiti

Honduras

India

Indonesia

Jamaica

Kenya

3.0 3.0 0.0 3.0 1.0 3.0 2.0 2.0 1.0 0.0 0.0 70.0 3.6 15.1

3.0 2.0 2.0 1.0 2.0 2.0 1.0 2.0 1.0 3.0 0.0 45.0 0.8 2.9

3.0 1.0 2.0 1.0 2.0 3.0 1.0 0.0 2.0 1.0 0.0 45.0 2.1 24.9 4.2

2.0 1.0 3.0 0.0 1.0 1.0 2.0 1.0 0.0 0.0 0.0 75.0 0.9 1.5

2.0 2.0 3.0 2.0 2.0 2.0 2.0 1.0 2.0 1.0 0.0 50.0 2.0 12.4 3.3

3.0 2.0 2.0 2.0 1.0 2.0 2.0 0.0 2.0 2.0 1.0 25.0 2.5 8.8

3.0 1.0 2.0 1.0 2.0 3.0 1.0 1.0 1.0 1.0 0.0 35.0 0.2 1.3

1.0 1.0 1.0 1.0 1.0 3.0 1.0 2.0 0.0 1.0 0.0 40.0 N/A N/A

4.0 3.0 3.0 2.0 2.0 3.0 2.0 2.0 1.0 3.0 0.0 65.0 2.9 5.5

3.3% 7.3% 5,553,634 111.1% 49.4% 54.5% 0 18.4 341.2 52.8% 23.0% 38.8 479.2 498.1 2.8% 1.4%

1.2% 2.3% 1,455,980 40.0% 11.1% 14.5% 18,443 0.8 71.6 32.1% 12.0% 107.0 77.6 69.0 4.7% 0.0%

2.9% 2.5% 4,774,360 17.7% 15.5% 21.6% 0 24.4 317.3 -2.0% 12.0% 120.9 98.6 98.6 6.0% 1.7%

-3.7% -9.6% 12,637,061 70.7% -24.0% 2.1% 6,198 0.6 66.7 80.5% 9.0% 56.9 210.8 210.8 21.6% 13.4%

1.1% 2.2% 4,631,713 33.8% -1.7% 14.8% 2,034 3.4 108.2 29.8% 7.5% 87.6 200.1 202.3 8.0% 2.1%

2.0% 1.2% 7,792,279 10.6% 20.6% 19.2% 0 6.2 27.2 20.5% 2.0% 215.3 15.9 16.6 1.1% 0.0%

3.3% 4.0% 2,944,482 25.3% 11.9% 29.6% 11,649 1.7 117.8 29.6% 5.0% 74.2 86.4 81.9 12.5% 0.5%

5.2% 1.5% 5,473,937 39.2% -3.8% 16.8% 38,496 1.7 89.3 28.6% 12.0% 120.7 125.2 146.8 8.1% 0.6%

Kyrgyz Republic

Lebanon

Madagascar

Mexico

Mongolia

Morocco

Mozambique

Nepal

Nicaragua

3.0 2.0 4.0 2.0 1.0 2.0 1.0 1.0 2.0 1.0 1.0 55.0 6.9 16.0

2.0 2.0 2.0 1.0 0.0 2.0 2.0 2.0 0.0 1.0 0.0 70.0 1.0 5.1

3.0 3.0 3.0 1.0 3.0 1.0 0.0 0.0 1.0 0.0 0.0 85.0 0.4 0.5

3.0 2.0 2.0 2.0 2.0 3.0 3.0 2.0 2.0 1.0 0.0 40.0 5.0 30.1 10.5

3.0 2.0 1.0 3.0 3.0 1.0 2.0 1.0 0.0 1.0 0.0 45.0 14.2 40.2

2.0 3.0 0.0 2.0 0.0 3.0 0.0 0.0 3.0 1.0 0.0 60.0 2.5 28.2

2.0 2.0 3.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 0.0 50.0 0.2 0.3

2.0 3.0 1.0 0.0 1.0 1.0 2.0 0.0 0.0 1.0 1.0 65.0 2.6 8.2

2.0 2.0 2.0 2.0 1.0 3.0 3.0 1.0 2.0 1.0 2.0 65.0 5.6 37.5 11.7

4.0% 4.3% 4,959,053 110.2% 11.6% 23.4% 0 31.6 253.0 -31.1% 27.0% 77.4 122.4 122.4 3.1% 0.2%

4.0% 3.4% 14,951,809 12.2% 3.6% 3.7% 0

2.2% 1.3% 4,657,432 162.8% -7.1% 5.2% 30,074 1.1 122.2 11.9% 28.0% 34.4 146.9 167.8 7.5% 1.6%

8.5% 1.6% 5,278,782 3.8% 16.4% 33.0% 0 5.4 75.8 26.0% 1.0% 108.6 169.4 180.1 4.3% 2.6%

2.1% 4.7% 135,264,838 158.4% 3.6% 73.3% 194,286 1.1 647.0 82.3% 30.0% 64.6 157.3 190.8 2.9% 0.1%

2.6% 0.7% 14,550,830 14.0% -11.0% -0.4% 0

-2.3% -4.3% 2,842,607 73.8% 16.2% 11.5% 16,584 2.5 55.1 32.1% 11.0% 70.9 167.1 259.3 4.1% 0.2%

2.2% 2.8% 3,513,179 29.7% 15.1% 53.1% 34,561 2.5 17.4 48.9% 3.0% 190.5 18.2 18.4 0.6% 0.0%

-5.4% -4.6% 6,008,156 83.7% -13.3% -10.5% 0 2.7 264.3 19.9% 23.5% 88.9 141.6 138.0 16.4% 4.0%

122.4 184.2 175.3 3.5% 0.9%

124.2 89.3 89.3 6.8% 5.5%

Nigeria

Pakistan

Panama

Paraguay

Peru

Philippines

Rwanda

Senegal

Sri Lanka

3.0 2.0 2.0 1.0 2.0 1.0 2.0 2.0 1.0 2.0 0.0 65.0 0.3 0.9

3.0 3.0 2.0 4.0 3.0 3.0 3.0 2.0 1.0 2.0 0.0 65.0 1.1 4.8

3.0 2.0 2.0 2.0 2.0 3.0 2.0 2.0 3.0 1.0 0.0 40.0 0.4 4.9 1.2

3.0 2.0 3.0 2.0 2.0 2.0 2.0 3.0 2.0 1.0 0.0 55.0 6.9 9.6 19.6

3.0 3.0 2.0 4.0 2.0 3.0 3.0 2.0 3.0 3.0 0.0 50.0 11.2 33.9 32.3

4.0 3.0 2.0 3.0 3.0 2.0 2.0 2.0 1.0 2.0 0.0 55.0 3.1 11.7

3.0 3.0 2.0 2.0 2.0 1.0 1.0 2.0 2.0 2.0 0.0 55.0 0.5 0.9

2.0 2.0 1.0 2.0 2.0 1.0 1.0 1.0 0.0 1.0 0.0 60.0 1.3 4.0

1.0 2.0 2.0 0.0 1.0 1.0 1.0 1.0 1.0 2.0 2.0 40.0 6.5 43.0

7.3% 8.1% 8,412,253 14.4% 11.8% 60.2% 67,028 1.7 56.9 50.9% 5.0% 177.5 31.8 31.8 1.4% 0.1%

-2.1% -2.7% 3,326,817 11.8% 7.8% 3.4% 0 2.1 70.6 19.0% 7.0% 98.3 42.2 39.9 3.9% 1.8%

3.5% 4.0% 3,889,892 31.9% 6.6% 11.5% 2,134 4.8 241.2 10.4% 3.0% 76.6 225.3 225.3 5.0% 0.5%

2.6% 2.8% 92,852,458 46.7% 17.0% 35.3% 21,210 1.0 4,718.9 38.2% 172.0% 145.6 147.9 160.5 4.0% 2.7%

2.3% 2.1% 24,982,206 29.1% 5.1% 24.1% 4,442 1.1 1,391.4 35.0% 25.0% 99.4 204.6 235.5 6.1% 1.3%

2.6% 2.0% 5,509,136 15.5% 8.2% 20.9% 27,598 1.3 98.9 20.8% 5.0% 111.3 69.7 70.1 6.0% 0.5%

1.7% 1.1% 3,080,504 119.0% 46.4% 27.2% 21,045 1.5 44.5 27.9% 8.0% 52.0 203.2 205.2 4.6% 4.0%

0.5% 0.8% 13,178,211 86.0% 27.4% 18.0% 46,401 1.6 125.0 18.9% 12.0% 138.4 125.9 148.2 8.4% 1.5%

1.4% 1.1% 3,308,904 7.6% 6.2% 9.4% 13,896 1.2 56.7 19.5% 2.5% 149.4 30.5 32.0 5.0% 0.0%

Tajikistan

Tanzania

Thailand

Trinidad and Tobago

Turkey

Uganda

Uruguay

Venezuela

Vietnam

3.0 3.0 1.0 2.0 2.0 3.0 2.0 0.0 0.0 1.0 0.0 75.0 1.7 3.7

3.0 1.0 4.0 2.0 2.0 3.0 1.0 1.0 0.0 2.0 0.0 45.0 0.5 1.6

1.0 1.0 1.0 0.0 2.0 1.0 1.0 0.0 1.0 1.0 1.0 65.0 0.0 0.2

1.0 0.0 1.0 0.0 1.0 2.0 1.0 0.0 3.0 0.0 0.0 40.0 N/A N/A

2.0 1.0 1.0 1.0 0.0 3.0 1.0 1.0 1.0 0.0 0.0 50.0 0.1 0.3

4.0 3.0 2.0 3.0 3.0 2.0 2.0 1.0 1.0 1.0 0.0 60.0 0.8 3.4

2.0 1.0 1.0 2.0 2.0 2.0 2.0 3.0 2.0 1.0 0.0 20.0 N/A 2.6 N/A

1.0 1.0 0.0 1.0 1.0 3.0 2.0 1.0 0.0 1.0 1.0 60.0 0.1 0.5 0.5

1.0 1.0 2.0 1.0 1.0 1.0 1.0 0.0 0.0 0.0 0.0 55.0 9.6 66.1

1.4% 3.9% 722,427 88.4% 8.6% 39.6% 0 2.8 6,951.3 193.0% 987.0% 35.5 151.0 154.0 2.9% 0.0%

-1.5% 2.2% 14,893,446 40.3% 25.1% 12.7% 17,167 2.8 35.9 12.2% 14.0% 155.3 116.4 116.4 1.9% 0.6%

1.7% 1,491,914

-2.9% 6,391,117 4.4% 22.6% 23.5% 21,153 7.5 37.8 81.2% 0.0% 160.0 90.5 92.5 6.7% 0.8%

3.3% 3.4% 10,974,203 83.1% 10.7% 7.6% 74,694 3.2 59.9 16.1% 13.0% 94.1 165.3 177.8 3.9% 1.7%

-16.7% -16.7% 4,289,826 22.2% 83.1% 66.4% 0

-10.5% -10.5% 74,496,626 21.8% 11.7% -22.8% 142,897 1.9 271.7 16.5% 4.0% 82.5 493.0 493.0 1.3% 2.3%

3.9% 6.2% 1,167,890 13.4% 8.8% 14.0% 10,986 2.9 35.4 17.8% 3.0% 155.0 16.5 17.4 0.0% 0.0%

683.5 19.8 19.8 0.1% 0.0%

45.4 783.2 1,201.1 9.2% 0.0%

Yemen

2.0 3.0 2.0 1.0 1.0 2.0 0.0 0.0 1.0 1.0 2.0 90.0 0.1 0.3

10.2% 3.1% 583,685 11.0% 7.7% 53.8% 5,173 5.3 17.8 25.3% 2.0% 108.0 40.2 39.0 1.6% 0.0%

INDICATOR NOTES

Argentina 1 1.1 1.2 1.3 1.4 1.5 2 2.1 2.2 2.3 2.4 2.5 3 3.1 3.2 OVERALL SCORE REGULATORY FRAMEWORK AND PRACTICES Regulation and supervision of microcredit portfolios Formation of regulated/supervised microcredit institutions Formation/operation of non-regulated microcredit institutions Regulatory and supervisory capacity for microfinance Regulatory framework for deposit-taking SUPPORTING INSTITUTIONAL FRAMEWORK Accounting transparency Client Protection: Transparency in pricing Client Protection: Dispute resolution Credit bureaus Policy and practice for financial transactions through agents ADJUSTMENT FACTOR: STABILITY Political shock to microfinance Political stability

Armenia

The Superintendency of Financial Institutions of the Ba The overall framework in Armenia rema There are no specialised juridical vehicles for microfina Becoming a regulated microfinance ins Administratively, forming an NGO can take up to one ya Armenian laws and regulations do not Specialised expertise and methodologies for microfinan Market informants continue to regard t Institutions operating in taking in Armenianot allowed t Deposit microfinance are remains rest

There is a large gap between anecdotal information pro According to the standards followed by There is no requirement to publish effective rates, and p Introduction of new laws on a Financial There is no specific regulatory framework in place that The prevailing view is that the legal fram The country hasThere are two credit plus a public regist 26 private bureaus, bureaus providing Argentina is still Armenian the use of technology applied behind in laws continue to be silent on

Although accessThere have been no domestic political t to financing remains a weakness, there

Azerbaijan

Bangladesh

Bolivia

Bosnia

Brazil

Cambodia

Cameroon

Chile

China

Three types of institutionsfour allowed toon Banks and are actively engagedCentral do in Bangladesh: Grameenactivitymainto usuryby microfinance sectorand regulationsactiviti There are are typesLaw conduct involved in microfinancein microlending in Bosnia & Herzegovina remains broadlyunder specific specialized de BancosforInst The of institutions regulatory and supervisory frameworkregulation, (1995) and(either governed laws, the Superintendencia microfinanceanc The Financial The Banco activities Brasil BankCentral Bank) isPursuantmicrofinance NGOs (of which law conducted byMFIs); Entities (1993), the Central in Azerbaijan: banks the moreregulator, the microfinance 570 (Rglement n1/03 Licensing, (theMicrofinance Bank; is through The supportiveas laws is are licensed theba Law and supervision of than 1,000 serviceor of microcredit lending e bro their subsequent amendments provide in China, defined ba downscaling providers the main juridical N Regulations seem conducive to the formation ofSetting up Greenfield MFIsbanksCambodia has institutionsnot seemenabled thegroupsregulationsbe legal statusas anon-deposi Banks in Bangladesh enter the microfinance sectortheand 1990sthat provideNGOsand doin(MFIs) as majority to formation MFIs are establishedas of lend direc Fondos Financieros Privados (FFPs, by lending to microfinance aThe overwhelming anfor the specific NBCIsencourage non-governmentalpre-a new greenfieldIn private financial funds) were standardized process arerelatively easyof ofcan FBiHthe creation theha a orga MFIs late and forming new MC, new traditionally overly no formation of greenfield and types of microcredit and early 2000s, has regulations been restrictive. have formal registered by legal entitie created 1995There attractiveMCCs ofin both for MFIs. The can greenfield or directly (over 90%) to two distinct RS with savings and vehicle poor individuals. They NBC bureauc Nonregulated institutions essentially various Supreme DecreesWhereasof 1990, 26140Code andanddesignedcontinues to beBank inversus supervision based onpersonswhet NGOs were in Azerbaijan cannot provide the passage in bothMicrocredit Regulatory Act in conditionsthe governingis considered prudentNGOs late segment con Under unregulated until microcredit.of the regional entities of Inspecialised legislation subsequent effect formation ofjuridical size.non-regula The legal framework Because the Civil framework countryofbyand Central an NGOcreation of the microfinance 1990s define (22409 the regulatory of 1991 the 26973the2003),for regulationNGOsinstitutions Microcredit Regulatorycho The legal framework sets 2006microfinance law, non-regulated or COBAC must participant drafting Establishing conducivenotsince 2007, in the strategically wit the non-profit The is to prohibitive. credit-only,register Au private implemented by market NGOs, co The central bank, as MicrocreditSince the late 1980s the supervisory focused stretched the regulatorySupervisory theSuperintendenciaintofinancialpublishinghasPBCFinanciero The the main oversight institution for(MRA) initially body, is on the Financial System capacity regulatorylaw, and quality) to understand ofitthe MCOs in FbiH (S Regulatory Authority has financial sector,the Central Bank Bank of staffthe microfinance capacity foris de Bancos esector, SistemafourtoCBRCre There the been Although now The NBCs has strong general at(in numbers COBACregulatorythat Institucionesroom differen some improvement in in terms Under capacity Thestandards, Banking Agency capacity the MF market. of MF issuing licences,Supervision Department is organised the Supervisin del information Thus,i setting accounting Regional and collecting and supervises Financieras Authority (Autoridad de separate divisions with and impro The the exclusive regional supervisor abou Among institutions providing microcredit in Azerbaijan, only banksfrom credit unions their have obtainedFBiHcategoriesandno specific regulationsunder public licenses andmay Present regulations bar MFIs from taking deposits MCOs,as banks, Fondosinstitutions in bankand RS areexclusively allowed to Category these Category 2profit Regulated microfinance institutionsand anybodyMost that members (except institutions of whichOfCameroon, and services, althoughregulated Under the Law on such all microfinance Financieros Privados Grameen, MFIsdeposits. SCMs, however, and savingsthosebusi Most regulated microfinance institutions arefor (FFPs, private financialoperating microfinance institutions,for but MFIs and unregulated permitted to take in the regulated regarding deposit-taking who Of the three licenses are have been funds) mobilise 1 which are allowedon There non-deposit-takingcredit cooperatives are Their foll is provide financial organizations. in to

The June 2004 Law on Accounting and the Banking LawIFRS to International Accounting Standards (IAS) in framework for those technical areasof Financebroader
divergeAccord Bangladesh does not permit theConversion by domestic auditing standards areitlimited to scope As as Bangladeshproviders under its the has set Azerbaijans ba Economy-wide, Bolivia'sof 1996 The Central Bank has reported slowthatbegantowardson accounting and auditing in and financial institutions s use of accounting and listed companies, but The progress IFRS of DecemberThe 2009, allamongsttheyfirst entitiesaccounti assign standard-setting responsibilities allthe MinistrycomplianceFinancial Reportingnorms. Regulatedtofrom The NBC mandates legal microfinance in 2002 31, Ministry NBA, respectively. forth institut has adopted in and, ofservice with MCOs banks supervision (BFRS).prescri earnest Finance and to the where Standards use its embr with international the exist, financial secto There is no legalTransparency inAccordingnotthe Financial routinelyfinancial institutions have to orofde Supervisin themes in 2011,10%, NGOtransparency with regard to allTh obligation for providers of microcredit to Systemhas become oneare the (Autoridadrates on atheThe Ley their promotional materialsputting a interestexistingsti pricing is to a major issue in Bangladesh. There interest rates publicise information Calculation of(rglementwithrequirement, any rates. 200 Client protection Supervisory Authority issuance fees 65headline delgivenProteccion al regulators01/Cemac/Umac/Cobac) on All disclose their of three lending its publicly. Thus,in de theFinancieroASFI, on on their lot ofLoans in re Since its most prominent of flatmicrofinance Law with Consumidor banking 12.5%, and fees Article prakas on basisGrameen Interest Rate the (Consumer Protection La the Sistema Standards of no. PKSF loans regulator), BRA lack of regulatory Microfinance pressure tr The civil code prescribes how non-payment of aThe regulator has been pressuring MCOsno commercialSupervisinadelareevent FinancieroASFI,establish later in service regul The regulatory and business environment does not provide forAuthority (Autoridad any disputesThereariseno group thatbasic (minimum) mechanismsresolving According to themicroloanSystem Supervisory any dispute-resolution mechanisms newSistema of disagreements themechanisms for or Thecl Financial by a borrower wouldTheredispute The central bank has inoutside the judiciary, no formal is no official 2011 a lende There are no specific is to resolve de or small-claims court specific dispute settlement bemicrofinance for c be handled. resolution mechanismsworking in Cambodia,consideredbanking regulator), Boliv In January 2011, that the with borrowers through bilateral burdensome form a law guarantees plans to between negotiation. and There are and there to banking mechanism There is a publicNo credit bureau covers microfinance borrowers. dramatic improvementbureauthanmicrofinanceofpublicCentral Bankbanks,centralinsetonlyopenbutallcreditto M credit registry, Azerbaijans Centralized Credit Registry (CCR), which has more forforBanque deslending,following for allowand staffcreditis apartly the Chinainfo Since the debt crisis ofhas been a Microfinance institutions MFIs) relymicrofinance.creditpeer the works forregulated MFIs arrival creditsystemb There 1998-2001, ASFI hasspecificregulations The threeeffectiveness registry, operated via thewas the information yet to There is no issuedcredit in credit bureaugroup Ahas been in monitoringa years with up access ofit is registry A credit bureau openingyears Etats de bureausthe set up butownfollow-up to toopened Cre for on private The LAfriqueto credit (BEAC)SBIF, bureau,ensure high lo historyThere is crisis Cambodia, to a institutio Centrale its it credit bank state-ow The technological sophisticationMobile financial ExtendingAzerbaijan ishas a vast The Ministry of Economynobanking regulationpoints and or branchlessbeing doneyet.thisbut itof MFIs are not at present banking is legal in microcredit and/or repaying microloans through mobilenomicroloansor Internet is notphone,disbursement, BEACno of the allowed sector for regulated institutions network of wellMC and/or repaying regulatory telecommunicationtransactions thoughveryas to offer money-transfer services low. sometimesThere is for formal phone, no specific regulations in place regarding the are ea Brazil relatively and Extending regulatedThere There regulates Mobile for microcreditbanking, Internet is se through mobile offered and Finance are (over 100,000 correspondentes bancarios), use is phones. cash in/cash out forframework money activities butin A marke is agents POS, through mobile yet bankingor still at Bangla electronic for mobile POS, is there which

Azerbaijan has been free of been significant tensions betweenupThere have microfinance other significant changeslargest microfinance institution,China would affect the politict There have any Political tensions have have been since mid-2010Thereor operationsBangladeshsneed or of MF significant changessince havegovernment operat political developmentspicked theno political tensions haveexpectationsfinancial eventshave been nothe operationtheperthe no political series c There negatively affecting beenas Grameenshocks or past year,Thereto tightenpolitical tensionshaveorhas beenhavepolitical o government and unmet been no politicalthe stability other providers. There or other significant a shocks no political Bank,the tensions there been no that would affect of operation of or financial In and tensions would affect political shocks been that stabilityremov that in Brazil In the past year, that financial free affected government spending se sparked of of mi

Colombia

Costa Rica

Dominican Republic

Dem. Rep. of Congo

Ecuador

Egypt

El Salvador

Georgia

Ghana

Regulated institutions involved in microfinance that banking industrythe sector underGeneral deThe ofavailable in Egypt since lesser1965 and Ghanadel Sistemacentral microcret The General Superintendency ofThe are supervised byis still in itsMicrocredit has been include banksBanking afromis of separate superintendencies institutions p The Bank SuperintendencyEntities (Superintendencia of September 2008 mandatesand,formationcivilcharge its supervising and regulating(SSF Financial regulatesnew constitution the authority main regulatorythe hasLaw Theextent,in of subsequent 003-2002bank)In ( The the Financial Superintendency countrysGeorgia to relatively 1980s, 2003. Law withamendments. the infancy following the the General body is the of in advanced and microcredit-friendly2002 Entidades FinancierasSUGEF)Superintendencia (BoG, thethe first the legal emergence the late warof beginning no. Financiero publ Bank non-banking financial for of is There is no special designation for microfinanceA numberNew or existing entitiessuchspecialised there have beenforlegal categoryand aaspecialised years,basedthe major byit There are no specific legalthe 2005 for microcreditsignificant numberminimum capital requirement incorporatedan the regulatory process formillionBoG chang Based on vehicles Non-Governmental Organisationmajority of institutionsnot formalinsetting(NGOs)can regulated financialalltoinstitution, m vehicles. of Greenfield microfinanceof as Law, As microfinance institutions (MFIs) continueseveral microcrediton and desig A institutions. The (NGO) non-governmental allowed to transform Egyptian bank is EGP500 entity (approxim The institutions (MFIs) is engaging administrative intopastare regulated mostlybecome form NGOs are no organisations upInstitutions to exist among setting up regul The microfinancefor unregulated non-governmental organ in are enter as or upgrade funded fina NGOs face no significant regulatory barriers in formingare not one of the fivein microcredit, in regulatory and legal terms and usury rates.clientsof Civilmicrofinanceregulatorybrp The relevant laws is not difficultNGOs may alternatively be constitutednon-regulated NGOsare also subject Foundationscommunitythe NGOlegalother84agreed It under which NGOs and NGOPreviously, numerous are the Law of they non-regulated co-operatives respondentsnotsolidaritytoregulatedof to open an becomingmicrocredit operation although Associations, permitted five of six orsector-wideloans and survey twomic or a active listed legal forms of MFI organisation Lawcurrentto The new NGOsare andSocieties;(No.but of 200 The Ministry of Social Solidarity Under regulates NGO-MFIs under also the EIU to providebe NGOs and (including foundations and face no significant law or law, to (MSS) of to legislation They with to subject all microcre provide Law are allowed banks) opera In general, the Financial banking-sector regulation by the General Superintendency is knownstarts, ofHowever, supervisory capacityofits tohas orbut and enforcementanother ad General Superintendency (Superintendenciacall There isemerged in of FinancialBCC. SFF (Superintendencia General deGeorgia, which forchargefor sectorstanda A patchwork regulatory framework annual on-site visitsandthe EntitiesSuperintendency regulatory/supervisory non-existent. Thesupervisingfo Regulations FinancieraSuperfin) fits by forcapacity hasstrict specific with Bankin BoGof microfinancefinancial conducting it for has substantial, specialised The bank and FI and professional is limited limitedthe banks,of modest num Although capacity as avery regulation since theTheintentions, unit capacity and ofhas imp being for oneThe National good Entidades FinancierasSUGEF)capacity oversight institutions regulation limited specialised and a activity supervise is is regulated (with spe The only entities thatregulated financialtake deposits from the public aredeposits, by the bankingandregulated financialto corporationsexternalBank deposits and offer deposits. s Only are authorised to institutions are allowedUnder of defined which forcescomprehensive services institutions sourcesfinancialoperates can take financialSa Regulated microfinance institutionstake authorized framework, most3 have been Althoughtheir clientele, totimedeposits from customers,instituB Under Instruction 001 the existing to provide 2banksnon-regulatedbanks are accept voluntaryfunding andand somepressures du to are 2005, only Category All as banks,only NGOs volatileon Central funding (mainly strict regulatory r Under the 2003 Banking Law, financial offerrelyThe and of inmicrocredit a second-tier). Reg law MFIs are permitted to permittedprovide deposits,products These althou able to savings both savings liquidityand credit. that accept co-operatives. co-operativ

The superintendency requires regulated institutions DRC has in de factoaudited raised concernsaccountingqualityare financialand complyTheyto market have followsubmit detaile Accounting norms among regulated financial a prior years has financialthe for aboutThere are noauditing is enforced. Inpressure onrequired Institutoin Colom The closure of several banks institutions approximate IAS, NGOIFRS and externalof requiredreporting. witharethese disclosure and IFRS are su The to publish annual two-tiered system and Banks and regulated MFIs fundedfinancialFebruary donors been the transparen Annual externalUnder and ratings are required for regulated institutions, statement audit standardsenforced audits statements. NGO-MFIs Regulatory to co-operatives that 2010, the to well destand law, the standards. NFBIs legally bindingAccording and alsomanualmicro-credit repor investor by international provide bookkeeping Cont simple operators IFRS/IAS, whe The Financial Reform Act (Lawin Regulatedlowby For banks in display interest signedexpenses inenforcing the Finca,financialdifferenteffective rates, fullnorms strong bankssector, sn Transparency 1328), passed for both must Juneand, especially,Under Article Julyof the Bankingdissemination of GHAMIN interest and customers nominalmem pricing is institutions regulatedThere are strongnon-regulated (Procredit, disclosure a bank is required and a numberprivate) transparency toa Congress and MFIs supported byregulations 40Disclosure and With of to protectinterest promotesto of obligatory forcompet 2009 and rates, Multilaterals MFIs. Regulated Law, 47effective MFOs to disclose the price insurance banks into law and commissions measures licensed transactions liberaliseis and are among inter 2009, took applied to institutions internationalrates the of their financial etc), conforming consumers, and terms of loans,required is to (both public transparency commission Before 2009, client-protection laws wereCommissionDRC is alsoof 2009, established a system league table onmain on anthird-party mechanismsandaddress and disputescredit. a The National Consumersurvey respondents said well bankdel ConsumidorCNC)El Salvador Protection Law,for microfinance clients. offersthe FinancialservicesT Half of haphazard. Law 1328 Nacional superintendency 2006 Consumer of consumersmeasures main a systemcontractsconciliationcomplain The (Comisin The down the international- for protection has several ad hoc two for is components: protection unit (Unidad that there is no specific mechanism for dispute resolutionwith a There enforcingtofinancial services providers Under the deals acts as the World Bankoffers basis through its clientreferringPro Consumidor with complaints consumer-protection agency forfor disputegetting Ombud Georgia microcredit and avenues 1) customer andTh number of other However, resolution. co Although there is no public registry, there areregistry and at present no functioning both hasand Therethree private bureaus.creditaprivatepositive data areprivatecredit and to N There is a small Both a registry,two private two private bureaustrack creditprivate-bureaubusinesses. has credit and registryand publicin microlendingonline with public public mostly are creditCredit bureaus,exist,CBE individualsand (though increasingMFOs The lackOne ofhas beeninformation caters thet There restricted to information by and for bureaus, andthe country Negativehasand banksthat withthe depth are provider), rem bureaus that both with banks, and areusage Georgian inBoth some ofinvolvedprivatedistributed, informa The public maintained a three Equifax now particular.dealing the microfinance: one that sp private central database bureaus monopoly bureaus of gainingbeen private received virtual good credit aconnected has incre score 0/6 for as bureaus continue Decree 2233 in 2006 created the through agentsfor the IDB focus on whereby formal technology The beenonlytobeing offeredin recent RCBsbanks wouldforcredit,is poor. Althou Banking services Non-bank Correspondentsdeveloped anCostaofloans. The larger banks plan country intofinancialwhichTentativesavings,haveinnovationsfirms In a 2008 study Most MFIs and MIF/Fomin, Dominican Republichas policy framework analyzed in transactionsstoresbanking technology serv are poorly (NBCs) savings and The financial institutions these commercial businessesyearsofferand debit cardsnotagents inFin This is in area Rica, with the majority Ecuadorean microfinanceinternational mobile therefore (ProCredit, m weakness within the of allow enter Egypt by Most such regulation allow been specifically was the emerging in for some the larger thatthrough provide and domestic Although mobile/SMS banking and to agents financial to d sector. no as efforts banking made was

In contrast to itsCosta Rica has aAccordingoftraditionally andbeencurrency and bankingor makesEconomist changes, asmicrofinanceare notenvironmentin in stable operation doof neighbours, Colombia hastodemocracy enjoyedThere have stability that risk in significant Intelligence of aresector iswithwould directlypoliticaltransitional period tradition the EIU, sovereign, ano political tensions sectorshocksmajor shocks forside.tensions highly outlook remainsvery tensions power o There have political/social been no political risks Salvador's microfinance still substantial weaknesses Georgia,as combines u high degree of stability. The Egypton the demand Units political-risk unlikely. nomilitary regimetransfers n Political other anyremain stable. There mid 2011, that have been The affect the but theyother El remains high within The DRC well-established andinthe competitive,of a Political the regulatorya uncommon government accounts, b There transition is a fiscal in or wit

Guatemala

Haiti

Honduras

India

Indonesia

Jamaica

Kenya

Kyrgyz Republic

Lebanon

The Law on Banks andnew issues and challenges have arisenmain regulatorythe regulates and theCommission for set market Insurance Companies)BancosSB) and non-bankt Many Financial The Comisin Nacional de Bancos y wake of (CNBS, the NationalThe ofare free toMicrofinance services in atonKyrgyz no of main regulator. Organ Groups (2002) provides the Bank ofSeguros framework,2010 earthquake and the Act Banks (Superintendencia activities: do notisprovidedexch The Reserve in the India (RBI) January two types Microfinance tremendousgrantsrates presentisRepublic areface excessive Banks and otherThe central bank (Bankinstitutions that engage in microfinance de they Kenya (CBK) regulato financial institutions of JamaicaBoJ)2006 devastation suffered byauthorised responsiblela Superintendency of of regulates commercial banks, comprehensive regulat Banks and interest the the loans; the banks Banque de There is Central Bank Haiti. The foreign by Regulated, greenfield microfinance vehicle for microfinance,failedis not specificallyitregulated as athat fall underto establishorganisations Indonesiamicrofinance as a and other There is no specific institutions (MFIs) have as Organizations (Organizaciones PrivadasseekingfocusedFinanciera-Nomicrofinancewhichbythe (MFI), nor anyto pr Private Financial Development it to only microfinancevery difficult juridical vehicleoperation.microfinancebe certifiedonintheformation as asso Several non-governmental organisationsno special forinitially the foron MFIformation of division (BI), are2001 departments b The emerge, and is is (NGOs) that non-governmentalthe Banks regulation existsGroups (SHGs) specialised There providersBanks definancial three a types must were created do so central bank MFIs distinct Desarrollo setting up OPDFs)establishinstitutionmain supervisory o All supervision of Bank (NGOs, can theconstituted of spec a can Self-Help without restrictive Around 300 NGOs (constituted as foundationsNGO-MFIs mustThe mainasallsociety, trust, co-operative society,ToCivilinco-operatives.producera(Unidad maymutualAct and thQ NGOs, foundations, village banksor civil fairly straightforward. NGOs/OPDs must register with the(NGOs),microcredit. Itgovernedcompanyde services beyondM Creating an NGO/OPDsolidarity groups can a formGuatemala, around andof services areSociety Registration NGO must firstorfour formedAsocia and is associations) operate Non-governmentalnon-regulatedunregulated MFIs arehave licences to offer Registro benefit so register informal providers of microcredit which are in and operate NGOs 45 other non-profitmicrocredit,Otheras more than be monthswitho as organisations entities. operating as civil associations,Companiescapital and provide company, takes than putting institution de the m SomeRegistration no by the up seed with and even an Unit financial register under Specialised capacity remains at an general, regulation and supervision ofsupervision are departments thatSupervision DepartmentinremainsCBK isdespitethe centraldedicated General bankingIn embryonic stage. Reserve Bank ofand the financial sector is considered sound, slowUS$150,000)(BSD) in the rate ofnoThat as hasresponsible and financial institution official All commercialspecialist weak. Themaximumbeen asand supervisedco-operatives, hasof banking, mandateinshi The The regulation India of a microcredit loan supervision of the financial bylevelIMF, the central bank. personnelconsequent definition has banks with microfinancehas of about to regulate and and bank improved, authority loansth Regulation and (a BRH operations are regulateThe central seriously of adirectly riskwillto fe The Bank examine capacity thethegeneral have the inadequate; bank the The noted sector by independence one legal including d various aspects non-performing manag Banks are the principal regulated institutions financial institutions engaging in microfinance areBanksactivitiesterms deposit-taking the areinthe law regulationswide toMFIsof deT Regulations currently prohibitunder from using customer(accounting regulatory loansector arefordeposits of all regulation limited thesectorallowed is understoo All regulated MFIs the the largest MFIs deposits to for 75%of environment andAs of outstanding institutions, companies (sociedades financie NBFCs, supervision of the Superintendency offer both time and this type of types, including financieras thatimposed by can Deposit-taking banks, which of allowed to in engaged in microcredit; microfinance tonotsubject it range Bank The fund their the that deposit-taking institutions finance MFCsnot explicit, toaccept depo Regulated take deposit-taking in loans permitted extentis extremely weak. demand deposits, are subject to areare to which accept sa Although 2010), is take a can prudential

Throughout the External audits are2009 a regulation was and unlisted companies, andbody in Indonesia is as mandatory for largerinstitutions, inGAAP,acceptedsound and even economy, IFRS In required of banks andpassedregulated must complyAn IMF andstandards forStandards.Accountants from USthe bothNGOsof IFRSby 2001 ver required for Banks andother The India institutions. were firstIFRS are required for all financialAll MFIs registered(Ikatan and increasing inter all listed NBFCs inset reportingAs from January adopted theBank report thatspecifically, withofto be IAS Akuntan in law subm to main accounting provisioning the the Institute of Chartered Accountants and intention mustand several a and with Indian AccountingIndonesian These differ Association as based adopted financial 2011 World microfinance auditing practices2002, regulated the the IFRS Since 2002 IAS were supposed Jamaica to be as Indonesia companies appear has on their non-regu In principle, the There is Bank requires publication of central bank requires microfinancing NBFCsAs in othernon-regulated institutions; their well asby orsuffers frompractice,ban Central some regulation of interest-rate disclosure forratesSistema Financiera)clear prime problematic, with publicity) fornowebsites MIX Marketnewspaperstra The Financial Systemeffective interest are required to publishdisclosureforlending ratesthoseresearchsome legal and other other in a lack of ho The Law of 2004 (Ley regulatedInterest-rate butto publish effective interesthidden fees,as followfees and practices is,(orby fi Banks del (such institutions, requires effective According to ratesmicrofinance sector relevant Incharges 100% as in loan agreements,is African countries, disclosure their best norms of fair disclosure thr none on websites and in the on to rebates requirement for MFIs howev interest-rate offered conducted customers. There frequentl There is regulated institutions. 2009, w These issues areWithentirely to the discretionspecificinternal policies ofgrievance-redressalself-regulation.ThedisputeBanks practice between set standards betweeninstitutions,m left few exceptions, there remains little legal recourse institutions borrowers inefficient.dispute The usualdisputes whencooperatives,disputethe resolutionCom There are no of There are no resolution for Haitian andhighly who micro-financeresolution Doing Business nofor appealingregarding disputeofp the dispute effective mechanisms isisto systems. Sa-Dhan,World withauthorities do saveinadequate borrowersOPDF's). and Indonesias judiciary or norms for fall intoThe an (for banks, financieras, notdispute arises to and within custo There no body dealing specifically Kenyas a regulatory their lenders, are lender and for microfinance the association of community-development-finance an MFI com mechanisms a 2011 reports that Haiti's highly in There are specific NGO's mechanisms re There is an inadequate patchwork system publicIn Marchat the major and two mainBureau (India) informationwhichcaterscore the0.0 out ofundertakingno project theform a publ The lack of goodThere isinformation information.Creditobstacle to manages whether or not to grant credit onthe ThereBureau presentbureau, Credit World Ban credit a of credit has been a CNBScentrallenders choose credit Ltdwhich of a newis owned by the banks a maximuma formallycreditpublic Cr registry 2010, The Information private bureaus, prior to the There isof theof BRHpopulation.both positive inbypronounced P Regulated bank microfinance, and result tend earthquake adult wasreport Peoplesprivate banks (Banks Jamaica has a Credit Information 25.2% to Reference of information BradstreettotheTrans Uni As a (CIBIL), onto Credit banks, one are at regulation credit andInformatio Index currently which andDun & supplied negative info basis private credit of 6.0 and bureaus There are good regulationssignificant hurdles to Allare freeMFIs listed inbranches, pointslarge correspondent microfinancethat isthatsophisticationmobile-phonerecent years. Th Haiti faces that Regulated entities Indian to establish MIX Market largely service andloans. bankingsignificant point-of-serviceaRetail locations not and moneyK permit correspondent banking, and two banks operate 2009-10The Kenyan Banks istechnologicalis haveand MFIsof thenotify thesector microfia widespread financial access, with a for of rural, offer agencies throughoutprocess of to serve.to worldwidedo are abundant, The post office company, Pos Indonesia,of Jamaica offerthe the costly NBFC needno restrictions on and inestab The Development Bank is the most networks country grown a greatprocessing CNBS projec low-income population deposits, but piloting agent, deal in banking pionee The in market considered a generally leader MFIs the There are few only financial 20m writi

The country hasAccording to the EIU, shocks affecting microfinance per se or Asian in financial instability. This is despite of severeunstable throughoutMFIs sawd'tat.PARs spike been free of political the extremefull-blown crisis in 1997-98 causing the microfinancethe political environment Therein 2007,economic coupinis weak, divided Porfirio Lobo, ofA weakness of Haiti's governingThere have been keepviolenceof Theshocks affecting the microfinance most ofshocks directly sa the centre-rightThe October 2010(PN), has largely succeeded in period declining (AP)Indias effectiveness during A collapseaf Partido Nacional financial crisisno recent political current electionsfromand July 2009 upheaval. market boto institutions willAfter sector following Pradesh political the most important2011-12. preside represented a Andhra the three-party coalition no political their AtAn inte healing wounds have been government MF this the co government many sector Jamaica. The

Madagascar

Mexico

Mongolia

Morocco

Mozambique

Nepal

Nicaragua

Nigeria

Pakistan

The Stratgie Nationale de MicroFinance (SNMF,ythe National(CNBV,legislationCommission Rastra 2004 arestillsupervision of microfinance is onefor the promotion,in theupCred The Comisin Nacionalintents and de ValorestheThe National governing doesBanks and andnumberisthe MFI sets 2011, grants engagementto minimalthehas d For all BancariaThe 1997 Microfinance Associations Nepal of regulation Securities) inthebank) requires commercialfew countriesfor andincludi purposes, Microfinance Strategy), devisedno. Bank andaadopted Central mid-Pakistan in Mozambique microfinance, world Mongolian government (law not18-97), engage in ofas of Bank a regulatorthat provide begins with authorit The Law the in directly the central principal frameworkexclusive microlending asregula There (NRB, in The 2007, market. Indirect theis banks is set aside well, effect financial institutions (CBN) financial system of Nigeria of responsible growth to 3 and Greenfield MFIs, commercial banks and other specialised MFIs are regulated by The 2005 microfinancethelawthey meethasthe Nationalcapitalandbanks, instructionsMFBThree The SOFIPO is the de facto vehiclesteering committee, 570microcreditsavings of Finance, theandfinancial theactivelyMongolia arequirement which theredynami With 12 commercial banks and nearly including the Ministry cooperatives, of microfinance areregulate microfinance has changedAssociations A for regulated MFIs wishing to register as MFBs providersgovernment subsequent decrees isgreenfield, regulated issued.allo for-profit credit and institutionscan do so the the two systemthe microfinancethe formalization of non-regu main formal and law ifCentral Microfinance Policy Framework, as amended in 2011, stil The 2011 toThe Bank, and Establishing over-saturated. Becauseare 21 promote minimum Federation of Microcredit the lendin in encouraged seven of of MTn70m. is Ea For Tier-1 institutions, such asare the main formNGOs can only operate in oversight is restricted overastheNepal are of the provided theofare recognised as andexclusively in micp SOFOM-ENRs co-operative associations and NGOs, CSBF of there are categoriesto composedlicences, ensuring consistency inlaw, there informalbasic governan The non-regulated microfinanceMFIs classified under currently After regulatedunlicensed financial providersoperationsmicrofinancefor opera of non-regulated MFIs and Mongolia isin Moroccoandin according often 2011 microfinance thatand 2005, ascope many are industry microfinance primarily awarding of Until theemergence semi-formal include non-governmental Microfinance services D approval to C 1,600 of these institutions on by CONDUSEFs register although service institutions (seeNon-bank, unregulatedis microfinance institu 2004 decree formalmust operate informal microfin above). They MFIs in little sources, such The CSBFs capacity tois strong as a general banking central bank (BAM) is responsible foris responsiblemain andwithOFISD islevelsbasic rule-making SupervisoryMFBs, and with CNBV oversee and regulate MFIs now in operation is in place, but comparison to otherfor monitoring experiencedof havefor supervisor, the SIBOIF hasaimprov Mongolia possesses regulator, having helped restore the are differencesnations Theregarding responsible beendespite the creation of since th The well-developed framework and capacity of financial of opinionfinancial whileeffectiveness, including licensed NGOs,to reg The regulations The NRB health As bankssupervision inall financial institutions, significantly enhanced hands in there the regulatory oversight of similarcrisis ofmicrofinancepolitical, andofrequired specia of the after the MFIs, its All financial the supervision social developm most Mozambique economic, providers are capacity to ens the mid-1990s. authority lies in the has a The 2005-016 microfinance law Thosein section 1 abovetake deposits, SOFIPOS deposits underbypermitted deposits and collectionin all all 2005-016 establishes three(which are While non-regulated SOFOMES cannot sets theAmong to take and SOCAPs are Banks and to take banks areMFBsTheto three tiers (Unit,A, Bbanksapplytiers and f cited commercial banks not permitted institutions regulated the current law. Deposit andsubject exclusively regulations presentspecifically MFIs are that provide microcredit are permitted to accept banks,regulated and offerand other grantedthe case CinSOCAPs, on legislative framework for different development credit co-operatives and micro-banksState aimsinstitutions-Commercial banks, classesNBFIsRegulated by the is regulatory environment and National) bro the BoM, of MFIs. The law finance companies--Type microfinanceMorocco un deposits 95-030 micro-savings. In to that of take depos SIBOIF that provide at and more

The finance ministry introducedWhile most Mongolian businessesfinancial statementsaligned withusing intervened2006,isand independentlocal ICAP pledged totheStandards au Standards vary widely in practice, depending onThe BoM reports that it has its size IFRS. IFRS since(ASB) higher with SECP and accountingwith ensurewhether accounting andMoroccan banks and financial The Accounting After issue Board in inWorld Bank'sfinancial statutory bodytostandards,regularisan auditing regulationslegal status institutions regularlyandThesetend to and requireseveralReportin the early 2000s the IFRS form the in 2005 that are MFI, been (standards guidelines an it has2004 banks Mozambique and andthere a of the are prepared it auditedTheaccordance based on organizations undergoinstitutions Standards financial statements at medium-to-large institutions), under intern be closedThe international standards creditresponsibili required all on Observance of full com There is no law requiring interest-rateare not legallyclients and there largestinterest Decemberfees, but, in practice, mostTchuma2009Socremo)thatandMFBsprotection providego Disclosure of effectivedisclosureThere is currently no may be hidden costsfour: feesfinancialto borrowingcompliance andA recenthigh. best obligatorysetting of th MFIs interest ratesrequired to state regulatory instructions in2010 related NovoBanco, openly publish their feescustomer practice,A, B andaC tf to is required of all their MFIsIn ratesspecifically protecting microfinanceto banks isCGAPetc).follow CONDUSEF publishes mo The regulated system and the the central bankand (application requires Larger interest rates. their client (the big and ProCredito, and disseminationa and fees, interest ratesNigerian microfinance s Disclosure system directed of SBP generally institutions (classdoIflaw was According borrowers. financial all institutions for banks effective report, the is educate any The 1992 constitution formally separates the ruling party from the state, Users (Janresolution. Resolution of taking as2005 regulatory lending protectionfor a example,Frenchlom The Law for Protection and Defence ofis no mechanism for dispute 1999) (BoM) has begun disputes a specialisedimplementingprovide based for the foreclos The Mongolian legal system provides some forms of regulatory framework has oneborrower andSBPs doesandsystemspecifiedjudiciary suffersN There FinancialThe Bank with executive, legislative andbetweenbranches. Madagascar's legalinstitution. agency for complaints, Services of Mozambique established CONDUSEF steps environmentguidelines only is For2004, resolvingMFB The dispute resolution judicialbusinesslengthymechanism to address all customer pastfinanci Nicaragua and The is towards thecostly not17, mechanism that the duedis a third-party and Circular theissued in mechanism for di consumer a Moroccan on requires Beginning in 2008 the is a private bureau, the a Creditoversaw the creationLLC a larger MFIs and banks of allaloans,in theis amicrofinance over-indebtednessof creation of Althou There Millennium April 2009,Account Information the countryscredit bureau registryplanfollowing the generalNicaragua andThis information aggravatedBu In Challenge Bur2008, as partthatBureau with(CIC) becamerecovery have theirTheremicrofinanceaborrowers, althoughaboutnegative informa In de Crdito, The works of There is no creditMFIsare monitoring bureau; both report positive as well as recentavailableNig of central bankaggressive a for bureau was temporarily suspended during the height crisis, is and specia maintains legally incorporatedcredit bureaus in lack of incorporated registries exist. suchtu There that few own country. The newly information Creditborrowers in to including microfinance loans. MFIs, both general political m Both public for private the Information a There is a difference between the services offeredbeen slow to be improvedbutofTraditional service delivery methodsor isbanking.Comprehensive branchless Centralwidely, 2009 Innovations in microfinancehave, in recent years, adoptedintheirmarket, backedallowservices byThere large financial institutionsmobileofAccsBank,(BB) regul Some MFIs have 2009, Maroc Telecom (MT), Moroccoshighto Servicesoptimism looking forward thanks Bankin Mozambique,adoptedin early In by the major operators the branchless financial of operator, along withis now potential for such as lawsvary still central The provision there is a largest by external finance financial institutions active and Banque bankingtransaction technology degree for offered a non-bank Attijariwafa are examples banking is Populaire ( mobile mobile phone significant permitted in based financial the in from by dominate, but there a agent microcredit and MicroCre However, series of new development

The disputed presidency has movementover theThere are currentlydecision-making process, leavingnegatively impacted much ofTherethe operation The Metical,ruraldissentpra A grassroots long hung rising inflation, recent weather-related shocks forthat have itwith a devaluation risebeenhas political shocks thepolitical of theareas.po Despite of debtors was formed in the early and disasterstensions havedeadlockedto tooversectoraffectnow. currency, or stability tensions that to countrys political no food 1990s known as El Barzn as a reaction affect microfinance operations. politicalinsist thatmicrofin Rising political fuel costs,microfinancecontinued fornegativelyrepossessions in both urban and contributedAl Political combined which would a of two years experienced no Nicaragua's microfinance Mozambiques Marketsignificant volatility from th There have in the agriculture industry, and debt relief by w no have been operators tensions or other 2008 some in a w

Panama

Paraguay

Peru

Philippines

Rwanda

Senegal

Sri Lanka

Tajikistan

Tanzania

Banks and finance companies are the main regulated institutions active NationalMicrofinanceMicrofinance inChapter IIIspecificallyin the GeneralNo.threeMicrofinanceand thefro The main regulatoryregulatoryisSince the adoption of a in has remained stable that holdhas madeto major shift supervision of National thedifferoften cited fram The authority framework for microcredit microfinance. Banks in recent ofin effect a operateoutThe2009:ratificationof theFinancialofPolicy O the Banking Superintendency and its legislationstems fromregulationRwandaas since the Bankthe a489 categoriesother Insuro Specific microfinance authority The lack years and in spelled since has promoted 40/2008 microfinance bank Strategy for regulation a licence is of Organic pertaining to microfinanceEstablishing law, has been 1997, the government countrys Law regulatory and subsequen Regulation and a microfinance bank of (1995) to policy as Central Law Law only is microfin While there is no legal in some other countries,framework providers laws or provisions the single-purpose,3, or 4Regulationsmustinvolvedbanks. The policyandasimilar thatope Unlike framework for microfinance in are no of risk categories, provisioning, aregulated institutions specific arebeThere are consistsformsobtainadvantagessince The regulatory Regulated establishes three distinct types ofandSrimicrofinance law,thrift or co-operative in legal of RDBsformation ofspeciali there terms special of microfinance services arethe like, there is institutiontype of institutions BNR for However, licencenewfoc Groups seeking Under for current Lankasregulated microfinanceapply to the (MFIs).in the regulatedMFI Regu to establish category-2, as rural,which can fourbankingprovisions theThe banksMFIs, the classified regulatedthere are broadly conducive andspecial such specialis a microfinance sector licence to for environment of M possible microcredit. 2004/05 to up NGOs may operate in microfinance and they and tax-exempt, butmicrofinancelaw allows for non-governmental organisations (NGOs) and(closed) existencewithno thethemainSe The legal framework permits areThe to engage inThe new to of non-licensed, informal microfinanceorganisations Levelis notstruggle to raiseoutaby supervisoryia Credit NGOs NGOs microfinance they cannot take deposits. Not many microfinancelegal framework they conducive toremain thein unregulate co-operatives continue MFI with operational flexibility as the latterNGOs institutions, particularly as therecapital. Nationalfun activities operate as non-regulated MFIs; non-regulated(category-1), suchmust institutionsformationunregul The previous MFI regulatory scope groupsmembers-only co-operativesset of that The and h Voluntary service excluded, yetin Sri Lanka as tontines, theoperate regulatio The are exist, recognized, the register is non-regulated and 1 institutions, as to largely past International organisations suchThethe IMF andathe OECD have generally qualitySincederegulation ofSamurdhi Authoritysupervision. has improved inBanksector.of acentraland t Poor banking regulation enjoys The central bank has a Micro,examination capacity ofthe sector in improved supervision of the the modestly, Department of sta as SBS has brought several banking crises since of its2008, policymaking forFinance National Bank owing to a lack ofthe handsthe bank, concem good reputation for the praised the general financial regulations extremely low, oflicensing are SBSs, thetoregulations the r Before 2010, Small and Medium Enterprise their 1991. of Sri Lanka Central Banks support even during bank Panamanian regulators authority,and Regulation In microfinance, dedicated For specialized The the BNR was supervision The regulates financial Supervision Division The Specialist Group that provides specific andexample, and Tajikistan (NBT), the central trained Co Banks can capture varied regulateddeposits (fixed, savings,regulated microfinance and regulations are consideredOf MFIsall thefocusingby have alwaysunder originto intermediatm Formally forms of institutions can banks, checking, of differentRwanda clearly states that thrift thefor itsare classifiedNGOs operating been onbyare categorized The regulatory framework establishes deposits without limitations,(rural, services the three forms institutions customerwhich2004income. mi As capture all types MFI law in degrees of 2008 Under the withmeeting regulated of MFIs allowedonin than their legal onas w The trust funds), service providers subject tolaw, exception of Act, Central institutions,microfinancepreventio Under the deposit-taking Financial co-operativeCategory-4 Banks Bank Supervision form app microfinance and Companies The in activity, rather insightlegallaw status reasonable, requirements of depending the and Division banks) particular the able of may Gu

Accounting standards for regulatedobligatory Accounting Standards companies adopted Central begunprovidesfollow IAS.ofandinstitutions follow internationalentitiesThe requir IFRS standards are institutions inbanks and dollarised(includingand the by Peruand thecentre documents wellimposes standards calledother accountingcount International for Panama's finance (IAS) weregovernment has Bank sector-specific setthatof suppliedyear,Banksandwith international stand All companies, banks economy the rural,subjecteconomy-wideSribanksensuring The microfinance)for accounting, which stand The Rwandan MFIsoffshore financial to move towardlate 1990s, and IFRScompliance accountants. firms,purp and are thrift On a whole, in Lanka is accounting standards, BankRfrentiel comptabl to co-operativeA majority providethis with accounting for all listed registerem the Beginning Central qualified standards forDivision company are required Supervision tax but Banks are required to state theirRegulated institutions areAct 3765effective), and Article interest-ratesector feesregulationsstipulateseffective interestpublicitynotwell astheyexpen The Central Bankinterest rates (both nominal and (The Truth in Lendingstate therates and and insist formsrequiring thatthat MFIs subjectSuperintendency enfor and consumerRepublic required tomonitor abuses of60 of whether creditorsare sufficient to of a Central institutions as aas operatingthe po protection agenciesBNR requires that interest There theyno inTheproviders ofon ofperiodicBanks rates to WAEMUtoDivision v The disclose effective the formal structures fixedon publication financial are recover is whether policies Ba clearly Act) requires Microfinance law of published as wellbasis. The their uniformly of an 2008 are are and or variableensure media rates,Bank Supervision atto are m all disclosure The interest and stating whole publish loans, SFDs as credit-granting NGOs, furn Disputes that arise from transactions withframeworkBSP has de Microfinanzas is Article 13 byoperatesConsumer Affairsa consumer protectionBanks Bankprotected bymechanis The ParaguayanThe legal regulated institutions Dispute resolution is oftenof by the anas a "financialacts asnon-bank disputes, agencyan the no banksover theAlm Microfinance Network (Red established a Financial resolved theTheSuperintendency. For arecourse mechanism for clients establishment whic The for consumer protection deprovided cited as Group whichthe growth of The as a instance of in unresolved is costly. th are monitored and Consumer Affairs 25868. There is Authority microfinance, as theknownsystem underof co Paraguay) Lawdecree establishingombudsman" in (2003)courts, there is of addressDivision No. obstacle to an observatory to the resulted are Supervision ACODEC Outside of redress Central clients body to formal consum Act the consultative court as INDECOPI thei There is no public registry, butinstitutions, thereUnder the Republic Actfrequently regionalasas onethethe mainthough arein Acthasis both positiveregionalSupervisionat (BCEAO For regulated therequality long-established private bureau (APC).identified theEquifax,Information System credit reference Banks lawnegative, all regulated e The is one of credit establishedPerulegal and(also known creditAt of national level, Sri Lanka (CISA)), signed into Bankbureausand public Bur are bureaus in The is 9510 regulatory framework hasupdatedThere for a microfinance provision.the inSBS which Tajikistan, m private credit bureaus (such as Credit whichin is currently under review bywith Paraguay), collects informati A It provides accurate, been strengths at presentCentral bureau since 2008, The Division bureau project place US-basedThe credit bureau, The central in provide cre information that affiliated the creditCredit Information cos is a no effective and 2009. bank low bo For banks branches are hard to establish, although their presence environment2009) lower banking the Central Bankof informationthein Senegal. allow the development of pom Currently, transactions sophisticated microfinance ingovernment of Rwandacosts. For NGOs andRegulationof technological innovations,more straightforward, Peru's through agentsCircular 649 (ofurban areas can and conducive facilities areuse 22, in payment systems.regulation inSupervision intereste BSPs are not regulated, and9, is only recently that towards innovation 2010)limited in placeUnderfor mainly agents provide The March it has been Circular 704 is limited co-operatives, set technologyrules BankFebruary 2010and Co Traditional hasThere (of December has startedThe Central a branchthe this area.isThere are encouraged the typically verynotworking on Banks is adoption is establishing to The micro-finance sector. no fully ground in the governmentand law co clients Division

Although there is high has been The new Humala administrationTherepolitical development, currenttensions no for thatoftensionsbeenCentralAnti-cyclical policies,publicthe justin There exposure no risk in Panama, development thatpoliticalsuggest any possiblethere thechanges thesignificant Theotherthat would politicalthe affectDivision im to recent political there has been no would been no major political poses some other microfinance the operationsin negatively microfinance There have beenwhichhave office in lateother significant dominance have havechanges significantBank MFI changes that oper no took tensions or July 2011 orbeen or politicalwould affectpotential effect on theSupervisionpolitical In the past year,Given predicted, ramifications questions over the adverse Banks or stability of enacted wou There may not or sector. involvementtensions affecting the state-fundedany major political of sector, sector an institutions the microfinance sector.

Thailand

Trinidad and Tobago

Turkey

Uganda

Uruguay

Venezuela

Vietnam

Yemen

The provision ofTrinidad lacks aThailand is generally Bank microfinance. The Bank (Banco CentralVietnamstheframeworkplays anactivities includingdelivery a whichBankingdoesp microcredit in regulatory framework government-sponsored activity,Institutionsdelderivesgovernmentthe financial-system inprovisionAlthoughis intendedSupe Turkeys microfinance for of Uganda Central Financial the lackwhichstifled Bancos y Otrasfrom the BankFinancierasMarch 2009, the BCU basis. The a sector remains constrained by bank), of aActUruguayBCU)Microfinance Law,roleAlthough a draft microfinance instit The (BoU, the central and this hasclear legal development of private sector the (Sudeban,regulates thelicen The Superintendenciaregulatesauthority for microfinance.Uganda Act 1993,commercial mic de its regular banking active of regulator. on of the require to The is Instituciones passed in lending, microfinance ser The regulatory environment is currently not is not possiblethecreatedregulatedsystem forchange oflegal vehicle for microfinance,are allowed tothere(NBFIs),Uruguaylaws.adminN There are no regulations dealingThe MDI Act set up a ofof private,supervised microcredit-only institutions inhasmicrofinance portfoliosnoprior intoMaster Plan Presently, it conducive to downscalingUruguay and2008 regulating and supervising Sudeban Turkey (MFIs). Indecrease in specifictier upgradin with the to formation regulatedno specialised leadership in the MFIs. MFIs resulted in a graduate from one the to Existin Since tiered has commercially-orientedfor semi-formal MicrofinanceinstitutionsFinancialto downscalethe n A financial institutions (banks and non-bank financial providers toare in or for areto and The rules microfinance institutions because the transform efforts licen The 2009 microfinance Law enables banks Sector specialised A few domestic While there are Microfinance restrictionsin Turkey argue NGO, SACCOs, fall underUnder DecreeNGOs smaller organisations grownupTrinidadat theof institutions a and international non-governmental organisations NGOsthere thereconsists of aorganisations may offer in Thailand. Owingcanuncertainty formsbeenSocialof of i no particular specialists on formingNGO and is Non-regulatedfew, very small Board operating in operating to continueusing activities legislatio Tier-4 institutions, (NGOs) do offer unregulatedfewestablishingservices Non-Governmentalinstitutions remit ofTobago. hardInt The an segmentlegal process for very small 165, of microcredit, but settingon these about the legality by a are only a microfinance organisations and microfinance much, having the hit There the National non-regulated microcredit outside the their Although NGOs has not Organizations and NGO without Ministry Fund Although the BOT has announced that regulatorof the best supervised and regulations thatinto beand Easternandcapacity Supervision Department acts Yemenmain licensing im The principal financial it intendsTheintroduce policies Trinidad and Tobago, andThedepartments, haveMarchthe centralCentralitBankyetaswhich(CBY) has hadwe Turkey has one is the Central Bank of financial sectors in Centralitssupervise Institutions of institution banksupervisesIt isprove that it hasforfm to BoU Banks Supervision unit The autonomy two Financial Europe but doesgeneral financial sector. to the is considered an Uruguay has adequate capacityof Sudeban (the government 2009 Banking Department,banks), is responsibleth is divided will torisk-based supervisory Since Commercial the that specialized oversight capacityCent regulate the not have any for microfinance the towardsdev the appropriate flexibility, has of moving Banco The state-owned SFIs are allowedregulation for are not allowed The only there are nothat institutions that with deposit-takingare of rangetakethe financial sector in general, only In the absence of to mobilize publicmicrofinance Financial Institutionsregulations market, may capturebeingofforfinancialof deposits from verypublicthere and 6Non-bank MFIs The MDI Act and sector, largest The only the MF dealing offers Atnumbervoluntary there intermediariessuch as banksfinanc the deposits. BAAC, the institutions prospects for non-banking may take different deposits.depositsare however, are (3-, c to take deposits.playerActmay take deposits from the public alloweddemanddeposits andtheUganda. Accordin The in regulate the deposit-taking activities MFI's. For At providers in atdeposits is onl Regulated MFIs a the the widest microfinance59,087 savers distant. Only ban MFIs end 2010 to were present, time microfinance

There has been Among regulated institutions, IFRS are required By law,theISAand1998. The 2004(this continuesissued theVietnamese Accounting Standards (VAS)bestthere are n progress in the financial services marketadopted IASin listed in In 2004 the Federacon de Colegio deAct has per Deloitte/IASPLUS); they reporting five phases According to market sources, wholeall all Uruguayan companiestwoaccounting standards,lendersSFD, in linethe financial (FCCPA,largely based Uganda as a accounting standards amongst theFinancial hasmicrofinance to also improvedde Venezuela are areReporting Stan for and adoption of international largestSAs)According but for follow International Financial in environmen unlisted firms Vietnam Institutions Contadores Pblicos with international the Venezuel (including to were required to are accounting standards also required for be 26 case the the microfinance industry, since practices. According to informed sources,institutions and their BoU publishesin MFIs disclose effective interest rates. rates, yet late,place atbyandFinance Deposit-Taking which hasand resp Only regulated neither regulated on transparency the interest rates of regulated have institutionsare in and feeshas level disclose their nominal, not MFIsinade Strict regulations norsubsidiaries are pricing thatAll regulated financial borrowers of basis. The Microbeenimplementationin transparencyAct No The non-regulated required to publishpractices MFIs improvedAlthough there the published by with requirementseffective, Interest-rate-disclosure effective interest InterestCredit given greatercompliance commercial banks,are over protect microfinance on Law on are required are the of banks,by the central bankhowever The 2010 a regular enforcement law supervision but non-banking not yet rates Institutions, to some increase of Institutions follo There is no mechanism forno dispute resolutionmechanismprotectionlenders and borrowers. Defence (Ley de Defensaarbitration microfinanceThailand. However,practice, Minis There are dispute resolution between microfinance policies are in place forThere are functioning mechanismconsidered onlyinstitutions.Division ofin Yemen.o There is a legal Consumer for dispute in place specifically forbanks, but resolution typically islack of demand. A Draftcaseresolution mechanism mechanisms or norms the Law of not developedDispute no domestic not Consumidor), Consumer resolutiondelinquency.and p Under resolution Consumer the microcredit/microfinance sector.general in of disputeestablished the The Venezuela lacks a well two regulation del forfor institutes dispute Affairs of in Protection Ac in Uganda, although are typically two forms in the an Dispute resolution There exists for The Uruguay has Consumer arbitration is The Bank of Thailand is considering, bureau, actively for banks2008are notboth positiveaand negativein Uruguay. a privateinformationtaking place:existing credit2010,systems.In There is one private but not TransUnion, which provides aused by microfinanceforcredit bureauSome advanceswith the currentcreditprivate bureauscreating b Credit bureaus exist pursuing, but theup separate microfinance new decreeincludes informationof internal (CBY) in Februaryrating had in 201 In December setting BoU approved licence institutions, which conjunction private creditcreditset utilities ashave asoffice. th Private and public bureaus operateCompuscan, The publictheir own Yemen bureaus.up and bureau from I Lenders have very limited access to Central Bank from retail, public information services. Un A data and on credit credit bureau offering the Debtors well are starti in follow and are was enacted score a credit bureau stron The governments attempts to encourage theof regulation, inmicrofinance. Establishing a branchgenerally oflow mono-productoffer and for agent-driven provision includinggov There are no specificabsence usein placebranch network yetThailand Post regulatorypointsignificant untappedurban a and currently authorises said ofafinancialfra The regulations of Bank for Uganda has of microlenders togrowing fromwith any technology for providing banksservices services, thelicenseap The the of theory, allows to services are provide microloansbase in both relatively with theirrange of that they consider com Agent banking develop a experiment a service outletproven successful. One respondent mobile banking s Microfinance is There is still a have not isbanking, moderate offering micro-creditlaws or framework Yemeni MFIs potential rural areas, particularly as for mobile sector, straightforward and requires country to low-i

The microfinance sector hasbeen no recent stable democracyaffectedrecentpoliticalfreesocial shockssector. Theaffectedriskfarmers andofor bybeingpolitical microfinanceasector.t There have been affected by the competitive populism of politicalparties, that is Western-oriented. Onon operationthereother significanttensions that2011), o Turkey is a shocks thathave been nomature bankingor of political promise debtto effecttimethe microfinance the government. for villagers of There have with a the has been financial sector that have an the politicalintervention in 2009 compiledMujica, who would Uruguay microfinance/microcreditriskshave notgovernment'ssurface subsidized micro-credit Therethat tooka The sector which is exposed been forthe this report was industry.the changes is would There having relief theof intervention are no to rescue (June-July risk At the tensions or stability of
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ce Law, passed in March 2009, is intended to provide a clear set of rules for the operation of microfinance institutions (MFIs). Prior to this, MFIs had operated in a veritable legal vacuum, thou ofinance Law enables banks to downscale and NGOs to upgrade so as to operate as independent commercial businesses. The law also requires downscaling banks and MFI banks to register w operating outside the remit of the Social Fund for Development (SFD)are by no means barred from microfinance activities, there are a host of obstacles if they wish to operate independently 09 the Central Bank of Yemen (CBY) has had the power to regulate MFIs as part of the Microfinance Law. A unit has been set up within the CBY to implement the task, and it is now functionin 010 there were 59,087 savers at microfinance institutions in Yemen (up sharply from 37,675 at end-2009). Although the majority of these were holders of compulsory savings deposits, a sma

e SFD, accounting standards are largely based on those drawn up by the Small Enterprise Education and Promotion (SEEP) Network, a global microenterprise network. The SEEP FRAME tool, has been some increase in transparency over the interest rates charged by banks to their clients in recent years, this has been voluntarythere are no clear regulations demanding that comp ally two forms of dispute resolution in Yemen. Formally, there is the local courts system. However, the quality and timeliness of the court system in Yemen varies dramatically between govern nk of Yemen (CBY) set up a credit bureau in 2010 , and according to the CBY, all the countrys banks have now linked up to the system, including the licensed MFI banks. However, the MFI NG fer a moderate range of services, including compulsory and voluntary savings, credit and, to a lesser extent, insurance. Typically, however, the MFI NGOs do not provide the insurance directly

report was being compiled (June-July 2011), the political and security situation in Yemen was alarmingly unstable. Violence and unrest has afflicted provinces across Yemen, and the central g

had operated in a veritable legal vacuum, though they reported to the Social Fund for Development (SFD). The SFD is an ostensibly independent body, but it relies on foreign-donor aid and is ownscaling banks and MFI banks to register with the Central Bank of Yemen (CBY) and allows them the right to set their own rates (though NGOs that choose not to upgrade to a fully-fledged obstacles if they wish to operate independently. In particular, many have been held back by a paucity of funding and a lack of expertise. Despite this, over the years, a number of community g to implement the task, and it is now functioning. Training the supervision department has taken some time (and continues), but it has been assisted by the German technical development ag holders of compulsory savings deposits, a small number of the SFD-overseen MFIs also offer voluntary savings products. Al Amal bank, the first MFI in Yemen registered under the CBYs micro

croenterprise network. The SEEP FRAME tool, which is in accordance with the IFRS, is an Excel workbook that tracks 18 financial ratios, in order for MFIs to improve their financial statements are no clear regulations demanding that companies clearly present their rates, both in the Microfinance Law and in the earlier Commercial Banks Law. Nevertheless, the larger MFIs are gene m in Yemen varies dramatically between governorates, with the prospect of lengthy delays sometimes deterring the aggrieved party from taking the case before a legal judge. As a result, man the licensed MFI banks. However, the MFI NGOs are not covered. The credit bureau was installed after software was donated by the UAE. According to the German technical development ag MFI NGOs do not provide the insurance directly, but instead act as an agent for an outside insurance vendor (thus, the MFI does not acquire the liability), though Al Amal provides its own Tak

cted provinces across Yemen, and the central government has lost control over large swathes of the country. Many banks have closed their doors, and foreign diplomatic staff have pulled ou

t body, but it relies on foreign-donor aid and is headed by the deputy prime minister and minister of planning and international co-operation, Abdel-Karim al-Arhabi. (As of June 2011, Mr Arh Os that choose not to upgrade to a fully-fledged MFI bank can remain outside CBY supervision). However, limits are placed on the maximum amount that can be lent to an individual or compa this, over the years, a number of community groups and concerned individuals have sought to introduce microfinance services, with assistance from the UNDPs MicroStart Programme, begu sted by the German technical development agency (GTZ; since renamed the GIZ), which has provided courses in, among other things, delinquency management and interest-rate risk assessm MFI in Yemen registered under the CBYs microfinance law, offers a host of voluntary savings products, with a particular focus on women and children. Al Kuraimi has also begun offering volu

for MFIs to improve their financial statements and generate basic reporting for management decision-making and investors. All the MFI NGOs that now exist are required to submit a report e ks Law. Nevertheless, the larger MFIs are generally viewed as being proactive in encouraging transparency, and are committed to providing information on commercial funds and rates on re the case before a legal judge. As a result, many Yemenis revert to the traditional and time-honoured method of resolving disputes in the countrynamely, taking the case before a local shur rding to the German technical development agency GIZ, which had previously been assisting the CBY in developing a credit bureau, the present system is not well suited for microfinance, and liability), though Al Amal provides its own Takaful (Islamic insurance) service. Moves are afoot to broaden the range of avenues available for potential and actual microfinance clients, includi

rs, and foreign diplomatic staff have pulled out the country. Inevitably, the microfinance sector has been disrupted, and a number of the MFI NGOs, especially those in Abyan, Aden, Taiz and

bdel-Karim al-Arhabi. (As of June 2011, Mr Arhabi is believed to have left the country, and it is unclear if he retains his role at the SFD.) Moreover, the SFD headquarters is near much of the w ount that can be lent to an individual or company: up to 0.5% of all the MFIs capital, though this can be raised to 1% if the borrowers collateral includes, among other things, real property or from the UNDPs MicroStart Programme, begun in 1998. Most have eventually turned to the SFD for further assistance, however, which has offered financial and technical aid, though the SF ncy management and interest-rate risk assessment. The CBY has now completed phase one of its training with the GIZ, but, though an MoU has been signed for phase two, the GIZ has for now hildren. Al Kuraimi has also begun offering voluntary savings, with a minimum deposit of YR2,000 (around US$9). The 2009 Microfinance Law specifically prohibits MFIs from the receipt of cas

hat now exist are required to submit a report every month to the Microfinance Network (MN), which tracks the information via the FRAME tool. The MN also has a loan-tracking system, whic ormation on commercial funds and rates on request. Indeed, the National MF Foundation, the largest MFI in the country, typically posts information on pricing in a prominent place in its bran rynamely, taking the case before a local shura council, comprising elders of the tribe. Although such courts are hardly specialised in financial dealings, this method of dispute resolution ben system is not well suited for microfinance, and the GIZ had been working with staff at the CBY to enhance the system. However, the GIZ finance team involved in the project left the country i tential and actual microfinance clients, including via mobile phones. A workshop took place in March 2010 to look into the issue, with representatives from the Consultative Group to Assist th

GOs, especially those in Abyan, Aden, Taiz and Sanaa, may be particularly badly affected. The latest survey by the Microfinance Network shows that the operations of 88% of its members hav

er, the SFD headquarters is near much of the worst of the fighting that has occurred in the capital, Sanaa, which has made it difficult and, at times, impossible for many of its staff to work. Alth includes, among other things, real property or state guarantees. For Islamic finance products, there is no guaranteed rate, as returns are based on a profit-sharing model. Al Amal (originally ered financial and technical aid, though the SFD has in turn obliged them to comply with reporting standards. It is worth noting, however, that the SFDs role is merely as a supportive institut been signed for phase two, the GIZ has for now suspended its involvement in Yemens microfinance development, in light of the present political and security instability in the country. Accor ecifically prohibits MFIs from the receipt of cash deposits payable on demand through cheques and deposits related to wills. The MFI NGOs, which are not covered by the Microfinance Law

. The MN also has a loan-tracking system, which monitors instalments due. Separately, five Yemeni MFIs have their financial details and audits (including information on interest rates) posted tion on pricing in a prominent place in its branches; however, some of the smaller MFIs are limited by their inadequate systems. In addition, the effective interest rate (which includes compo dealings, this method of dispute resolution benefits from being both speedy and efficient, and the final decision is usually respected. The Microfinance Network is also planning to introduce gr e team involved in the project left the country in March, and its training operations are suspended. Despite the previous lack of a credit bureau, the practice of MFIs offering loans to groups o atives from the Consultative Group to Assist the Poor (CGAP) sharing their experiences with a range of Yemeni banks and companies. Subsequently, a pilot scheme was launched by the Yeme

that the operations of 88% of its members have been disrupted, with, among other things, credit officers in some areas severely restricted in their movements (and thus unable to collect repa

es, impossible for many of its staff to work. Although a paucity of technical expertise remain a major issue for any MFI start-up, the Microfinance Network, which has taken on many of the rol on a profit-sharing model. Al Amal (originally established under its own law in 2002, Law 23) was the first bank to be licensed under the new rule, with a second, Al Kuraimi, formally gaining he SFDs role is merely as a supportive institution, and NGOs are by no means compelled to sign up with the body. A small number of NGOs never signed up with the SFDincluding the Smal al and security instability in the country. According to the 2009 Microfinance Law, any registered MFI requires sufficient relevant technical and managerial experience. Despite this, the CBY st which are not covered by the Microfinance Law, are not allowed to offer voluntary savings products, but a small number do in any case, which raises concerns about regulatory oversight. Thes

including information on interest rates) posted on the MIX Market, and Sanabel (a microfinance network of Arab countries) has also included several MFIs in its MicroBanking Bulletin. Yemen e effective interest rate (which includes compound interest) is not generally made available to clients, though the nominal rate is. The central bank is planning to introduce a series of by-laws nance Network is also planning to introduce greater end-user protection, which would include improved complaint handling, as part of its wider programme to promote SEEPs Consumer Pro the practice of MFIs offering loans to groups of women (group solidarity loans), rather than to individuals, has apparently enjoyed considerable success; each woman in effective acts as a gua ntly, a pilot scheme was launched by the Yemen Post Office, in partnership with the Social Fund for Development (SFD) and CGAP. In principle, the SFD and Microfinance Network appear kee

eir movements (and thus unable to collect repayments) and often struggling to locate their clients (some of whom have fled the worst-affected areas). In addition, 50% of MFIs have reported

e Network, which has taken on many of the roles previously assumed by the SFD, was recently established to provide technical assistance le, with a second, Al Kuraimi, formally gaining its licence from the CBY in 2010 (it began providing loans at the start of 2011, and by June had four branche er signed up with the SFDincluding the Small Enterprise Development Fund (SFSD)but all are now included in the Microfinance Network (MN). MN is funded by ann managerial experience. Despite this, the CBY still gave an MFI bank licence to Al Kuraimi, which does not have a banking arm. Although Al Kuraimis entry into the aises concerns about regulatory oversight. These concerns are only heightened by the fact that the countrys deposit insurance law covers only any legal entity

veral MFIs in its MicroBanking Bulletin. Yemens MN also requires financial transparency from its members, including an independent audit. In addition, members nk is planning to introduce a series of by-laws as an add-on to the 2009 Microfinance Law, which would impose requirements on transparency, but these r programme to promote SEEPs Consumer Protection Guidelines. However, this process has only just begun, and, overall, there is no separate court o success; each woman in effective acts as a guarantor to the others. The main commercial banks tend to lend only to a small circle of well-connected figur the SFD and Microfinance Network appear keen to pursue mobile banking, in part because it addresses the challenge of population dispersion. However, it

areas). In addition, 50% of MFIs have reported that communication between staff has also been hindered, and all have complained that thus far no externa

N). MN is funded by ann mis entry into the any legal entity

addition, members