Is it time to regulate microfinance?

Fakhruddin Ahmed, Brad Brown and Susan Perry Williams
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Fakhruddin Ahmed: Former Chief Adviser (Head of Government) of the Caretaker Government of the People’s Republic of Bangladesh (2007–2009)
Brad Brown: McIntire School of Commerce University of Virginia, Rouss Robertson Hall Charlottesville, VA 22901
Susan Perry Williams: McIntire School of Commerce University of Virginia, Rouss Robertson Hall Charlottesville, VA 22901

Progress in Development Studies, 2013, vol. 13, issue 3, 209-220

Abstract: In this article we suggest a new future for microfinance institutions (MFIs). In order to better serve the needs of the poor, we propose government regulation, improved organizational governance and business models for MFIs. With a strict definition of ‘microfinance’, true microfinance can be properly distinguished from other forms of financial activities. With adequate regulation and supervision, MFIs can take deposits from the poor thus providing a valuable service while obtaining money to lend. We propose that MFIs meet a strict definition and then be regulated and monitored to protect borrowers, which will also help to legitimize the microfinance industry.

Keywords: Microfinance; microcredit; regulation; transparency; growth (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:sae:prodev:v:13:y:2013:i:3:p:209-220

DOI: 10.1177/1464993413486546

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