REGULATION AND SUPERVISION
Perhaps one of the clearest indicators of the maturity of the microfinance industry, of its persistence over time, and of the inclusion with the appropriate protection of the savings of those segments of the population with the lowest incomes in the productive system, lies in the regulatory and supervisory systems, that is, in the inclusion of their offer of financial services to microenterprises within the sphere regulated and supervised by a competent monetary authority.
This process has developed along two paths. The first has involved the adaptation of legislation, whenever deemed necessary, for providing access to the system to those institutions specialising in intermediation or in lending to microenterprises. This adjustment has basically involved lowering the threshold of required capital and linking this reduction to the limitation of their operations, normally those related to the attraction of funds from the public. This therefore gives rise to the figures grouped under the generic heading of Non-Banking Financial Institutions, which are called by a different name depending on the country.
The other path has involved expanding the supervisory capacity of institutions, central banks or superintendences, which wield responsibility over the banking system, to undertake the business of intermediation with microenterprises. This improvement has been noted in certain countries in Latin America, yet the same cannot be said for Africa and Asia, where there has been an improvement in the technical capacity of supervisory bodies but not so in the means at their disposal, whereby the increase in the number of institutions under their responsibility has not been accompanied by the corresponding provision of the resources required for carrying out their supervisory duties effectively.
The financial cooperative sector is also undergoing a process of including institutions within a sphere of specific regulation and empowered supervision regarding their financial operations and the means available for undertaking it effectively, especially in Latin America. In the other regions considered in this Global Outlook, the situation is characterised more by the maintenance of the status quo, as in the case of Asia and Eastern Europe, or by the specific progress made in those countries in which cooperative institutions are important, as applies to Africa.