A study conducted by the Economic Intelligence Unit (EIU), the business information arm of The Economist Group, the producer of The Economist weekly magazine, has ranked Pakistan, Cambodia and the Philippines first in the world in terms of regulatory framework. The study was based on data from 54 countries, measuring their regulatory frameworks, investment climate and institutional development.
The report characterizes the State Bank of Pakistan’s (SBP’s) approach to microfinance regulation as “proactive” citing amendments to banking rules intended to support microfinance banks (MFBs), such as lifting regulations that prevented them from accepting foreign currency loans from international investors and relaxing the limits on borrowers’ annual income upward from PKR 150,000 (approximately USD 1,750) to PKR 300,000 (approximately USD 3,500) for general loans and TO PKR 600,000 (approximately USD 7,000) for housing loans. SBP reportedly has also aligned the country’s loan classification criteria for MFBs with international best practices.
By Witt Gatchell, Research Associate
About Economic Intelligence Unit (EIU):
Founded in 1946, the Economist Intelligence Unit (EIU) is a research and advisory firm with approximately 40 offices worldwide. EIU provides analysis and forecasts on over 200 countries. EIU is the business information arm of The Economist Group, the producer of The Economist weekly magazine.
About State Bank of Pakistan (SBP):
Established in 1956, the State Bank of Pakistan (SBP) is the nation’s central banking authority. SBP performs several primary functions: to regulate and supervise the nation’s financial system, to conduct monetary policy and to manage public debt. In addition, SBP performs non-traditional functions: to develop the financial framework of the country, to provide credit to priority sectors and to help in the Islamization of the banking system.
Sources and Additional Resources:
[1] Daily Times: “Pakistan tops microfinance regulatory framework ranking: EIU” http://www.dailytimes.com.pk/default.asp?page=2010\121\story_1-12-2010_pg5_10
MICROCAPITAL BRIEF: The Economist Intelligence Unit “Microscope” Study Discusses Challenges to The Rapidly Growing Microfinance Industry
https://www.microcapital.org/microcapital-brief-the-economist-intelligenc…
MICROCAPITAL BRIEF: Peru Remains on Top of “Global Microscope on the Microfinance Business Environment 2010? Survey by the Economist Intelligence Unit
https://www.microcapital.org/microcapital-brief-peru-remains-on-top-of-gl…
MicroCapital’s Microfinance Universe profile: State Bank of Pakistan (SBP) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=State+Bank+of+Pakistan+(SBP)
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/tiki-index.php
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