Role of Regulation in Micro Finance: Jurisdictional Analysis

Abstract

This paper not only addresses how linkages, direct and facilitating linkages, can benefit microfinance institutions – particularly in jurisdictions where the Savings Group Outreach involvement is particularly low – but also illustrates ways and means whereby group lending and other more recent innovative methods used by micro lenders to secure repayments, could increase the desired effects, efficiency and impact of microfinance in selected jurisdictions. In so doing, it addresses some of the existing and persisting problems of micro finance in rural areas.

An innovative aspect of the paper is evidenced through its recommendation of the Micro-Savings Requirement Scheme – which offers numerous benefits – as will be highlighted in this paper.

Keywords: microfinance, regulation, agency theory, Micro-Savings Requirement Scheme