MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Focus Note Reviews Global Regulation of the Use of Banking Agents by Microfinance Institutions

A new Focus Note from CGAP (Consultative Group to Assist the Poor) examines the “global regulation of the use of banking agents by microfinance institutions (MFIs) and the issues regulators face in censoring the safe and scalable use of agents [1].”

The authors of this Focus Note, Michael Tarazi and Paul Breloff, conclude that “regulators can safely permit the use of bank agents to offer financial services and verify customer identity for know-your-customer purposes with minimal restrictions on agent eligibility, compensation, and structuring – provided that regulators hold banks liable for the provision of financial services by their agents [1].”

The Focus Note can be accessed at: http://www.microfinancegateway.org/p/site/m/template.rc/1.9.50439/

By: Alexandra Pattee, Research Associate

About CGAP (Consultative Group to Assist the Poor): Housed at the World Bank Group, CGAP (Consultative Group to Assist the Poor) is an independent policy and research center dedicated to facilitating the provision of financial access to poor people worldwide. CGAP is supported by approximately thirty development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors.

Sources and Resources:

[1] CGAP Press Release, “CGAP New Focus Note: Regulating Banking Agents”, http://www.microfinancegateway.org/p/site/m/template.rc/1.1.9981/

[2] “Regulating Banking Agents”, by Michael Tarazi and Paul Breloff, CGAP Focus Note: http://www.microfinancegateway.org/p/site/m/template.rc/1.9.50439/

MicroCapital.org Article, February 16, 2011, “International Finance Corporation (IFC) Grants $771k to Bank South Pacific (BSP) Rural Through Pacific Microfinance Initiative to Bring Electronic Banking Services to Rural Entrepreneurs in Papua New Guinea”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-grants-771k-to-bank-south-pacific-bsp-rural-through-pacific-microfinance-initiative-to-bring-electronic-banking-services-to-rural-entrepr/

MicroCapital.org Article, March 1, 2010, “CGAP (Consultative Group to Assist the Poor) Focus Note Examines Consumer Protection Regulation in Microfinance Industry”, https://www.microcapital.org/microcapital-brief-cgap-consultative-group-to-assist-the-poor-focus-note-examines-consumer-protection-regulation-in-microfinance-industry/

MicroCapital.org Article, December 14, 2009, “Branchless and Mobile Banking Could Become Top Microfinance Channel by 2020 Says CGAP Focus Note”, https://www.microcapital.org/microcapital-brief-branchless-and-mobile-banking-could-become-top-microfinance-channel-by-2020-says-cgap-focus-note/

MicroCapital’s Microfinance Universe: CGAP (Consultative Group to Assist the Poor), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+%28Consultative+Group+to+Assist+the+Poor%29

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