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Monday, August 3, 2020 | History

4 edition of Prudential regulation of the microfinance institutions found in the catalog.

Prudential regulation of the microfinance institutions

Wolday Amha.

Prudential regulation of the microfinance institutions

lessons from Ethiopia

by Wolday Amha.

  • 341 Want to read
  • 36 Currently reading

Published by Association of Ethiopian Microfinance Institutions in Addis Ababa .
Written in English


Edition Notes

StatementWolday Amha.
SeriesOccasional paper -- no. 15
The Physical Object
Pagination57 p. ;
Number of Pages57
ID Numbers
Open LibraryOL16859274M
LC Control Number2008349379

Prudential Reporting: Umbrella Associations of Tier 4 institutions shall collect and collate statistics on the operations of their members and furnish this to the Bank of Ghana periodically as may be determined. Licensing Requirements The licensing requirements for microfinance institutions are attached to this. The Prudential Regulation of Banks applies modern economic theory to prudential regulation of financial intermediaries. Dewatripont and Tirole tackle the key problem of providing the right incentives to management in banks by looking at how external intervention by claimholders (holders of equity or debt) affects managerial incentives and how that intervention might ideally be implemented.

The purpose of this paper is to examine the effect of competition and regulation on Microfinance Institutions (MFIs) outcomes in India. Using data for 60 MFIs from the MIX Market database for a period of five years from to , panel models are estimated for the empirical examinations. In the modeling framework, constructed Lerner’s Index as competition proxy and regulate dummy. The second section outlines areas of regulatory concern that do not call for "prudential" regulation. The next section discusses prudential treatment of microfinance and Microfinance Institutions (MFIs). The fourth section briefly looks at the challenges surrounding supervision, and the final section summarizes some key policy recommendations.

for Microfinance Banks in Nigeria, to address challenges observed in the implementation of the Microfinance Policy of and emerging developments in the industry. The Guidelines sought to promote rapid and sustainable growth of the microfinance industry, leveraging on global best practice in microfinance banking. Without such an environment, fragmentation and segmentation will continue to inhibit the institutional transformation of microfinance institutions. Van Greuning, Gallardo, and Randhawa recommend a tiered approach to external regulation, one that takes into account the different types of microfinance institutions, the products they offer, and.


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Prudential regulation of the microfinance institutions by Wolday Amha. Download PDF EPUB FB2

PRUDENTIAL REGULATIONS FOR MICROFINANCE BANKS Updated on J Maximum Exposure of a Borrower from MFBs / MFIs / Other Financial Institutions 9 Regulation R same Province or any other area where Microfinance Institutions Ordinance is applicable),File Size: 1MB.

Prudential Regulations for Microfinance Banks/ Institutions 7. Statutory Reserve The MFB/MFI shall create a reserve fund to which shall be credited: (a) an amount equal to at least 20% of its annual profits after taxes till such time the reserve fund equals the paid -up capital of the MFB/MFI.

Prudential regulation and the means to supervise and guarantee its application are critical in discouraging the opportunistic behavior that Prudential regulation of the microfinance institutions book emerge among deposit-taking institutions, given the temptation to take excessive risks when seeking higher profits.

From this perspective, the purpose of prudential regulation of microfinance would be. Prudential and Nonprudential Regulation: Objectives and Application 14 Box 2.

A systemic rationale for applying prudential regulation to microlending-only institutions. 16 1e. Regulate Institutions or Activities. 18 Part II. Prudential Regulation of Deposit-Taking Microfinance 19 2a. New Regulatory Windows for Depository Microfinance:File Size: 1MB.

This paper attempts to explore three main aspects of the current debate on the regulation and supervision of microfinance.

Using the case study of the microfinance industry development in Indonesia, this paper argues that appropriate regulation and supervision of microfinance is critically important in bringing the poor and vulnerable communities the financial services they need.

industry, the change from “credit only” activities to “deposit-taking microfinance institutions (MFIs),” and the entry of new actors and credit delivery mechanisms in the microfinance sector (e.g., mobile banking).

Today, there is a broad consensus within the microfinance community that the regulation. Examples of non-prudential regulation could include truth in lending laws, fraud and financial crimes prevention, interest rate policies, among others. These rules serve to protect the consumer.

The type and level of regulation depends on how the microfinance institute is formed and what services it provides.

Benefits of Regulation. Drawing the Line: When to Apply Prudential Regulation in Microfinance. 16 Timing and the State of the Industry 16 Sources of Funding 16 Rationing Prudential Regulation, and Minimum Capital 18 Drawing Lines Based on Cost-Benefit Analysis Regulate Institutions or Activities.

Special Prudential Standards for Microfinance. 20 Minimum Capital   While the Core Principles for Effective Banking Supervision developed by the Basel Committee on Banking Supervision have become the de facto standard for sound prudential regulation and supervision of banks, there is no guidance for microfinance institutions yet.

A recent BIS paper attempts to fill this gap. An earlier Policy Research Working Paper (Hennie van Greuning, Joselito Gallardo, and Bikki Randhawa, “A Framework for Regulating Microfinance Institutions,” WPSFebruary ) presented a regulatory framework that identifies thresholds in financial intermediation activities that trigger a requirement for a microfinance institution to.

Regulate Institutions or Activities. 21 Part II. PRUDENTIAL REGULATION OF DEPOSIT-TAKING MICROFINANCE. 23 2a. New Regulatory Windows for Depository Microfinance. The microfinance industry in the Philippines has grown into a $1 billion industry as of There are currently around banks and 2, microfinance institutions (MFIs) in the Philippines servicing millions of microfinance clients.

It is estimated that there are million borrowers and million depositors. Microfinance institutions are significantly different in their risk profiles such as risks on credit, interest and liquidity which provide a further argument for regulation and rapid integration with practices such as prudential regulation.

2 The policy justification for prudential regulation is to prevent the risk profiles and provides. Drawing the Line: When to Apply Prudential Regulation in Microfinance. 13 Timing and the State of the Industry 13 Sources of Funding 14 Rationing Prudential Regulation, and Minimum Capital 16 Drawing Lines Based on Cost-Benefit Analysis 17 Regulate Institutions or Activities.

18 Special Prudential Standards for Microfinance 18 Minimum Capital Prior studies using pre-crisis data concluded that microfinance institutions are resilient to economic crises. However, some recent studies indicate that the microfinance sector is becoming part of the global financial system and microfinance lending activities are now vulnerable to.

A wider mandate in terms of prudential regulation and supervision of microfinance that includes future deposit-taking MFIs would require adjustments to Capital Adequacy Requirements/ CAR, liquidity requirements, more regular and rigid on-site inspections, as well.

The analysis in depth of microfinance regulation in Latin America, hampered by the fact that microfinance rules are sometimes presented as a part of the financial system regulation and are sometimes part of non-specific regulations, has led us to the identification of additional categories beyond the usual separation between prudential.

institution types, loan documentation, portfolio classification, loan loss provision and write-offs, amongst others, and provides the basis for the establishment, operations, regulation and supervision of microfinance banks, and institutions.

Power to Regulate. Downloadable. We analyze the optimal policy of regulation of microfinance institutions in developing countries, where investment funds are insured by the government and customer deposits. We used a mixed model, combining adverse selection and moral hazard to characterize a class of optimal incentive schemes applied in presence of government funds and in non-government funded.

We understand that microfinance staffs are not usually familiar with reading microfinance books and resources. Forgetting that if forms the basis of what is needed to understand the fundamental norms guiding the industry. This is why we are taking the pain to introduce arrays of contemporary microfinance books for your learning delight.

In this book, the author, Michael Fiebig, takes a pragmatic approach, and makes extensive use of Prudential Regulation and Supervision for Agricultural Finance 6. Enhancing Farmer’s Financial Management Skills.

MFI Microfinance Institution MFRC Microfinance Regulatory Council of South Africa MIS Management Information System.It has now become an international prudential standard: CAMELS (acronym for Capital, Assets, Management, Earnings, Liquidity, Sensitivity to market risks).

I have made a version for the supervision of microfinance, called “CAMELI” (with an “I” for financial Information, a recurrent problem in microfinance).In Augustthe Bank of Ghana came out with regulatory and operational guidelines for microfinance institutions (MFIs).

The guidelines which are basically prudential and non-prudential do not.