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Displaying all posts under the topic of Regulation
My last two posts on the potential repayment crisis in Chiapas described the high risk of a crisis in Chiapas, Mexico, and its potentially devastating consequences to the microfinance sector around the world. But here is the good news: thus far there is no crisis, and one could still be avoided.
March 27, 2013
Worse than AP: The Damage of a Repayment Crisis in Chiapas
A month ago I wrote a post singling out the Mexican state of Chiapas as a potential site of a coming repayment crisis. No, this is not a follow-up announcing that it has begun, nor am I rooting for one to start. In my next post, I will review the options that the Mexican microfinance sector has to avoid it, and what the global microfinance community can do to help.
February 14, 2013
What’s Next: Another Repayment Crisis?
It's been over two years since the start of the great India insolvency. Four years since the Bosnia blight and No Pago Nicaragua. And nearly six years since the Morocco microfinance meltdown.
At this point, it's reasonable to say that the first global crisis in microfinance has passed. Life is on the mend.
January 15, 2013
Banking the World: Empirical Foundations of Financial Inclusion
About 2.5 billion adults, just over half the world’s adult population, lack bank accounts. If we are to realize the goal of extending banking and other financial services to this vast “unbanked” population, we need to consider not only such product innovations as microfinance and mobile banking but also issues of data accuracy, impact assessment, risk mitigation, technology adaptation, financial literacy, and local context.
December 14, 2012
Who Pays for Transactions? How Much?
One of the many important questions in the transition to mobile and/or electronic money is who will bear the costs associated with using the system. This question is particularly salient since the Kenyan government announced it was planning to begin taxing mobile money transfers, adding to the cost of the system.
September 26, 2012
What It Takes To Make Electronic Payments Better Than Cash
I attended the Better than Cash Alliance launch this week at the Ford Foundation. The alliance’s goal is to accelerate the transition from cash to electronic payments in developing countries. For a good overview of the process, benefits and challenges of the transition, see this white paper from Bankable Frontier Associates (which is one of our partners in the US Financial Diaries project...
September 14, 2012
Managing the Difficult Trade-offs in Microfinance Regulation
A few weeks ago M-CRIL, an Indian microfinance ratings firm, published a white paper on India's evolving microfinance regulations. The overall message is that while the proposed regulatory framework is improving, it still needs work. One particular point caught my eye:
April 5, 2012
What should regulators do?
There’s not enough academic research on the regulation of financial inclusion. Many of the questions might seem too applied for some researchminded economists, but that leaves regulators with few guideposts. It also seems short-sighted.
Regulators hope that expanding financial access will also provide greater stability to the overall financial system. This would occur as the market becomes larger and more diverse, and thus better able to withstand difficulties in any particular corner. The range of depositors would enlarge, as would the kinds of financial institutions in the market. Greater competition among providers would create pressure for quality competition.
January 31, 2012
Sanjay Sinha: A Rough Year for Microfinance
The microcredit movement is premised on the idea that access to capital will be liberating, empowering, and profit-making. But as the Indian microfinance sector closed out another year, it’s hard to be so ebullient.