The Inter-American Development Bank (IDB), a US-based multilateral finance institution that operates in Latin America and the Caribbean, and the Association of Supervisors of Banks of the Americas (ASBA), an association of pubic and private financial institutions in the western hemisphere and Spain, recently published “Guidelines of Principles for Effective Regulation and Supervision of Microfinance Operation.”
The document encourages transparency and improved rules for client protection including that microfinance institutions (MFIs) clearly disclose credit agreements and provide their customers with other detailed information on which to base their financial decisions. IDB and ASBA suggest that regulators evaluate credit agreements to prevent abusive practices. The guide also urges governments to take a stand towards creating an environment that will ensure that all individuals can access quality financial services. Rudy Araujo, Executive Secretary of ASBA, supports the effort saying, “Appropriate regulatory standards are fundamental to fostering a solid and competitive microfinance sector.”
By Julie Moksim, Research Associate
About Inter-American Development Bank (IDB): The Inter-American Development Bank (IDB) is a US-based multilateral finance institution established in 1959 that operates in Latin America and the Caribbean. IDB works with governments, companies and nongovernmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health, education and other sectors. IDB also provides technical assistance and research in these areas. Its Board of Executives is elected by 48 member countries, 26 of which are located in Latin America and the Caribbean. IDB reported total assets of USD 84 billion as of December 31, 2009.
About the Association of Supervisors of Banks of the Americas (ASBA): ASBA is an organization that supervises and promotes banking practices in the Americas in an effort to keep them in line with international standards. ASBA supports the development of resources for the banking sector including by conducting original research. Its members consist of public and private financial institutions in the United States, the Caribbean, Latin America and Spain.
Sources and Additional Resources:
Inter-American Development Bank (IDB) Press Release: “IDB, ASBA Say Microfinance Regulations Must Foster Transparency, Boost Client Protection”, March 23, 2011, http://www.iadb.org/en/news/news-releases/2011-03-23/latin-america-microfinance-regulation,9271.html
MicroCapital’s Microfinance Universe Profile: Inter-American Development Bank (IDB)
MicroCapital’s Microfinance Universe Profile: Association of Supervisors of Banks of the Americas (ASBA)
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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