CURRENT SITUATION

The perception of the significance of the supply of financial services to microenterprises varies according to the geographical region, ranging from its consideration as just another part of the regulated and supervised financial system - a view that is becoming increasingly widespread in Latin America and Eastern Europe - through to its situation in Africa and certain Asian countries, where it is deemed to be something separate, marginal and removed from the financial system.

  • The regulated and supervised financial system has an ever greater importance in the provision of financial services to microenterprises.
  • The regulations governing the microfinance business are catering for the characteristics of the intermediation with the microenterprise segment, and becoming more flexible in order to facilitate the incorporation of new financial institutions normally arising from microcredit NGOs that in this way can provide saving and other financial products and services to both microenterprises and the associated population. The conversions from NGO into NBFI, or from NBFI and NGO into Banks, are referred to as "upgrading" in this document.
  • The bodies supervising the banking business in each country are becoming mindful of the need to extend their responsibility to include those institutions that can intermediate with microenterprises, especially through the attraction of savings from the public. A bone of contention in some countries is the existence of a large number of institutions, such as cooperatives or other legal arrangements, for which these bodies do not have sufficient supervisory powers. As a possible solution to this situation, certain countries apply systems of delegated or auxiliary supervision, with varying degrees of success.
  • Cooperative savings and credit institutions, which are numerous in certain countries, are also in the process of coming under the supervision of bodies empowered to do so in Latin America and in those countries in which they account for a significant part of the offer in financial services.
  • Governments are proceeding, on the one hand, through the laudable approach of facilitating the industry’s development, and on the other, through direct actions that distort this development.
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