Launch of New CGAP Financial Inclusion Regulation Center

August 17, 2010    

As microfinance has evolved in recent years to encompass a number of different types of institutions offering a wide range of financial services to the poor, enabling regulatory environments have become increasingly important. However, it is often difficult to find information on financial inclusion laws and regulations.

To help address this need, CGAP is pleased to announce the launch of the new Financial Inclusion Regulation Center (the “Regulation Center”). The Regulation Center provides a broad, timely collection of the laws and regulations most relevant to key financial inclusion topics.

“The Regulation Center is a unique resource for financial sector regulators and supervisors, donors and investors, academics and researchers, and any others seeking information on financial inclusion regulatory policy,” says Tim Lyman, senior policy advisor and team leader of CGAP’s Government and Policy Team. “It provides both convenient summaries and core regulatory texts, and serves as a great complement to CGAP’s broader policy research and advisory work.”

The Regulation Center includes detailed profiles on nearly 30 countries across the globe. These profiles provide an overview of the financial inclusion regulatory environment, and a selection of laws and regulations related to microfinance and banking, branchless banking, and consumer protection for each country. Each law or regulation is briefly summarized, and a copy of the legal text is provided. Links to government regulatory bodies and recommended reading related to financial inclusion are also included in the country profiles.

A few of the many topics covered in the laws and regulations include:

• Banking laws
• Microfinance laws
• Cooperative and credit union laws
• Prudential regulations
• Anti-money laundering/combating the financing of terrorism laws
• Agent regulations
• E-money regulations
• Consumer protection laws and regulations

The information in the Regulation Center was gathered primarily through online desk research performed by lawyers and law students and, where possible, vetted by local experts. A number of sources were utilized, including central bank websites, online legal databases, and a wide variety of research reports, news articles, and publications. The core content builds off of a previous joint project by CGAP and the IRIS Center, the Microfinance Regulation and Supervision Resource Center.

“Online legal information in developing countries is often very difficult to find,” says Jennifer Chien, manager of the Regulation Center. “The main value of this site is in pulling together an extensive body of laws and regulations in one location that are carefully selected for importance, in a format that is easily accessible and allows for comparison across countries.”

Given this methodology, and the inherent challenge in maintaining complete accuracy, the content on the Regulation Center should be used for informational purposes and as a tool for further research and analysis. Using legal texts from the site for drafting purposes is strongly discouraged, as the context of the broader legal and economic system for each country must be taken into account to fully understand any legal text.

The objective, detailed content of the Regulation Center combined with the breadth of topics covered lends itself to multiple uses. For example, regulators can utilize the content to get a quick overview of regulatory frameworks across a particular region of interest, while researchers can study the legal fundamentals of a regulatory approach to a specific financial inclusion issue, or perform comparative analyses on regulations implemented in different countries for a specific type of financial institution.