A framework for regulating microfinance institutions : the experience in Ghana and the Philippines

An earlier Policy Research Working Paper (Hennie van Greuning, Joselito Gallardo, and Bikki Randhawa,"A Framework for Regulating Microfinance Institutions,"WPS 2061, February 1999) presented a regulatory framework that identifies thresholds in financial intermediation activities that trigger a requirement for a microfinance institution to satisfy external or mandatory guidelines-a tiered approach to regulation and prudential supervision. The model focuses on risk-taking activities of microfinance institutions that must be managed and prudentially regulated. The author reports on the results of the field testing and assessment of the tiered approach, focusing on the experience of Ghana and the Philippines. The two countries both have a wide range of informal, semi-formal, and formal institutions providing financial services to the poor, but differ in how they regulate financial intermediation activities by microfinance providers. In his assessment and a comparative analysis, the author focuses on key issues in the regulatory and supervisory environment for microfinance-and in the legal system and judicial processes-being addressed by government authorities and microfinance stakeholders in both countries. He gives particular attention to the thresholds at which intermediation activities become subject to prudential regulation and regulatory standards for capitalization and capital adequacy, asset quality and provisioning for nonperforming loans, and liquidity management. seeks to identify the key elements and characteristics of the microfinance regulatory experience of Ghana and the Philippines and to draw the lessons that may be useful for other countries interested in establishing a regulatory environmentconducive to the development of sustainable microfinance institutions. The experience of Ghana and the Philippines shows that a transparent, inclusive regulatory framework is indispensable for enabling microfinance institutions to maintain market specialization and to pursue institutional development that leads to sustainability. Clear pathways for institutional transformation facilitate the integration of microfinance institutions into the formal financial system.Payment Systems&Infrastructure,Banks&Banking Reform,Rural Finance,Financial Intermediation,Decentralization,Banks&Banking Reform,Rural Finance,Financial Intermediation,Governance Indicators,Poverty Assessment

Philippine Credit Policy and Microfinance Institutions: Some Lessons from the Latin American Experience

A liberalized and deregulated financial market environment as well as good governance are better ingredients than government-subsidized and directed credit programs in ensuring that low-income people gain access to basic financial services. This is one of the major lessons that the Philippines can learn from the credit policy experiences of Latin American countries.microfinance

A comparison of loan loss allowance practices in Asia

This Asia Focus provides a brief background on loan loss allowance and the associated supervisory guidance in the United States and compares different applications of loan loss allowance regulatory and accounting standards in some Asian economies. The report also highlights proposed alternatives for reconciling the varying goals of loan loss allowance practices and provides a brief assessment of their potential impact on Asia.

Sustainable Rural Finance: Policy and Design Issues

This Notes outlines the sad experience of the supply-led credit policy and subsidized direct credit programs (DCPs) in the Philippines. Said failure has led to the introduction of a market-oriented financial and credit policy framework thru the emergence of a new class of credit intermediaries--the microfinance institutions. The new paradigm and its policy and design framework is explained further in this Notes.microfinance, rural credit, rural finance

Effective Strategies Of A Behavior Management Plan

Our society is experiencing an increase in problematic behaviors across the nation, specifically in the classroom. Newer teachers specifically have a difficult time with managing behaviors and with a lack of consistency and continuity, consequently problematic issues occur more frequently. The author therefore tried to answer the following question: What are effective behavior management techniques and how can schools implement them across the secondary level and engage all stakeholders consistently? The review of the literature determined that the best methods included rules/routines/procedures, student/teacher relationships, behavior specific praise, nonverbal communication and strategies for a culturally/linguistically responsive classroom. These were combined to create a yearlong Professional Development Plan with the consistent engagement of administration and teachers as well as students to reduce behavior incidents and create a positive environment