Financial intermediation, regulation and the formal microcredit sector in South Africa

This article evaluates demand- and supply-side aspects of the formal microcredit sector in South Africa and the environment in which the sector is regulated. Although South Africa has a competitive financial sector relative to a sample of upper middle-income countries, the historical bias towards formal sector banking resulted in a lack of appropriate credit instruments for poorer people. In 1992, new regulations facilitated the legalisation of microfinance institutions and, by 2000, the sector had grown to over 2 per cent of total credit extended by the monetary sector, with over 1 300 institutions supplying microcredit to the public. The article presents the first statistics of different types of microcredit institutions as well as some of their disbursement trends, recorded since 1999 by the Micro Finance Regulatory Council. Thereafter, the demand for credit is assessed between 1995 and 2000, before best-practice regulation and South Africa's degree of compliance are discussed.

The development of microfinance in Cameroon: Focus on regulation

International audienceWhile the microfinance regulations in Cameroon have a positive influence in professionalizing the microfinance sector, it seems to have also created hurdles for MFIs to fulfill their social mission of financial inclusion. The evolution of activities of the microfinance sector over the years led to changes in the regulatory environment through the establishment of new regulations that progressively professionalize the sector and controlled certain derives. Financial inclusion has been hindered by insufficient supervision and tight regulations in terms of board members' qualifications, loan documentation requirements, and provisioning and liquidity requirements. Regulations still need to reflect more the specificities of the microfinance sector and be matched with adequate supervision in order to achieve its dual role of financial inclusion and safeguarding the financial system