Peter Van Dijk, a consultant based in Indonesia, recently wrote an opinion piece that appeared on the Microfinance Focus website outlining measures to enhance the rights of consumers of microfinance institutions (MFIs).
Category: Regulation
MICROCAPITAL BRIEF: Article Defends Indian Microfinance Institutions (MFIs) from Calls to Rein in Profitability
An article was published recently on the website of the Economic Times newspaper defending the Indian microfinance industry from more regulation, especially caps that might restrict the profitability of microfinance institutions (MFIs).
MICROCAPITAL BRIEF: East African Community (EAC) Seeks to Align Microfinance Institution Regulation
The National Bank of Rwanda (BNR) recently announced that it hosted a regional meeting of central bankers and regulators to discuss the alignment of rules and regulations that govern the microfinance industry within the countries of the East African Community (EAC), which includes the Republics of Kenya, Uganda, Rwanda and Burundi and the United Republic of Tanzania.
MICROCAPITAL BRIEF: Central Bank of Nigeria to Discontinue Issuance of Universal Banking Licenses, Introduce Three New Banking License Classes in 2011, Microfinance to Fall Under “Specialized” Category
The Central Bank of Nigeria (CBN), Nigeria’s central banking authority, recently announced that in January 2011 it will introduce three new classes of banking licenses—for commercial banking, merchant banking and specialized banking—as well as discontinue the issuance of universal banking licenses.
MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Report Recommends Withdrawal of Priority Sector Status from Microfinance Institutions (MFIs)
An unreleased report by a committee of the Reserve Bank of India (RBI) that was recently leaked to the Indian newspaper Economic Times recommended that RBI withdraw the priority sector status of microfinance institutions (MFIs), which allows MFIs borrow at lower interest rates.
MICROCAPITAL BRIEF: The Insurance Regulatory and Development Authority of India Proposes Steep Raise in Minimum Coverage for Micro-life Insurance Policies and Steep Cuts in Agent Commissions
The Insurance Regulatory and Development Authority (IRDA), India’s insurance regulatory organization, recently announced a draft set of regulations for insurers providing micro-life insurance policies.
MICROFINANCE PAPER WRAP-UP: Non-bank E-Money Issuers: Regulatory Approaches to Protecting Customer Funds; by Michael Tarazi and Paul Breloff; Published by CGAP (Consultative Group to Assist the Poor)
By Michael Tarazi and Paul Breloff, published by CGAP (Consultative Group to Assist the Poor), Focus Note 63, July 2010, 12 pages, available at: http://www.cgap.org/p/site/c/template.rc/1.9.45715/
MICROCAPITAL BRIEF: Iraqi Microfinance Institutions (MFIs) Agree to Code of Ethics at Inaugural Iraqi Microfinance Industry Network Meeting
At the inaugural meeting of the Iraqi Microfinance Industry Network in Baghdad, representatives of all 14 Iraqi microfinance institutions (MFIs) present agreed to a Code of Conduct and Ethics that mandates ethical behavior and a commitment to serving low-income Iraqis.
MICROFINANCE PAPER WRAP UP: Microfinance Activities and the Core Principles for Effective Banking Supervision, by the Basel Committee on Banking Supervision
Written by the Basel Committee on Banking Supervision, released in August 2010, 57 pages, available at http://www.bis.org/publ/bcbs175.htm
This paper written by the Basel Committee on Banking Supervision, a subcommittee of the Bank for International Settlements, which is an intergovernmental organization of central banks, reviews the applicability of its 2006 Core Principles for Effective Banking Supervision [1], the de facto standard on prudential regulation and supervision of banks, to the emerging class of microfinance institutions (MFIs), including both depositing-taking MFIs and cooperatives.
MICROCAPITAL BRIEF: Brian Cox Highlights Emerging Challenges for Microfinance Institutions (MFIs)
On August 30, 2010, Brian Cox, the president of MFX Solutions LLC, a company which offers currency hedging instruments, highlighted several emerging challenges that microfinance institutions (MFIs) face as they expand such as currency risks, tighter regulation, and tougher capital adequacy requirements in a recent interview with Microfinance Focus.
MICROCAPITAL BRIEF: Commercial Banks and Microfinance Institutions (MFIs) in the Economic Community of Central African States Required to Raise Capital Reserves to $20m
The Committee of Banking Supervisors of West and Central Africa, an organization that supervises credit establishments and sets prudential banking legislation in western and central Africa, announced earlier this week that starting from 2014, all commercial banks including microfinance institutions (MFIs) in the Economic Community of Central African States (ECCAS), a subsidiary of the African Union [1], will need to have capital reserves of USD 20 million.
MICROCAPITAL BRIEF: Consultant Sahil Sondhi Calls for Strategy Realignment for Indonesian Microfinance Sector
Sahil Sondhi, an associate consultant at Strategic Asia, a Jakarta based consultancy, wrote an article that appeared recently on the Jakarta Globe website calling for a new strategy in the Indonesian microfinance sector.
MICROCAPITAL BRIEF: Vietnam’s First Licensed Microfinance Institution TYM is Operational
The TYM (Tao Yeu May) Fund, a Vietnamese financial institution founded by the Vietnam Women’s Union in order to help implement the poverty alleviation program of the government, reportedly has become the first microfinance institution licensed by the State Bank of Vietnam, Vietnam’s central bank.
MICROCAPITAL BRIEF: Zambian Minister of Finance and National Planning Reaffirms Commitment to Build Financial Infrastructure for Low-Income Groups and Microfinance Institutions (MFIs)
Dr Situmbeko Musokotwane, the Zambian Minister of Finance and National Planning, recently announced that Zambia would extend its five-year financial sector development plan (FSDP), which had originally been slated to expire in 2009, to 2012 in an effort to build better financial infrastructure for different income groups.
MICROCAPITAL BRIEF: South Korean Financial Services Commission (FSC) Announces Stricter Lending Criteria for Sunshine Loans from Microfinance Institution Smile Microcredit Bank
The South Korean government recently announced the installment of stricter lending criteria for its “Sunshine” loans in order to decrease loan defaults. Sunshine loans are an offering under Smile Microcredit Bank, a state-run microfinance program established in 2009 to provide unsecured loans to low-income households through partnerships with the private sector.
MICROCAPITAL BRIEF: Islami Bank Foundation Allegedly in Violation of Licensing Regulation, According to Bangladesh Bank
The Islami Bank Foundation, a non-government organization funded by the Islami Bank Bangladesh Limited, has recently been accused of operating an unauthorized microcredit program, according to a recent investigation conducted by Bangladesh Bank, the central bank of Bangladesh.
MICROCAPITAL BRIEF: Pakistani Microfinance Institution (MFI) Farz Foundation Awarded Shari’ah Compliance Certificate
Pakistani microfinance institution (MFI), Farz Foundation, has been awarded a Shari’ah compliance certificate by Mr Mufti Iftikhar Baig, Advisor at Albarka Islamic Bank, and Mr Mufti Mahmood, Head of Online Fatawa Program, Jamia Ashrafia Pakistan.
MICROCAPITAL BRIEF: Kenya Insurance Regulation May Have Negative Impact on Microinsurers
Recent regulatory changes by Kenya’s Insurance Regulatory Authority that require an increase in the capital of insurance companies and the separation of life insurance business from general business could negatively impact the reach and volume of microinsurance in Kenya.