Consumer Protection Regulation and Supervision

As the official rule-maker and final arbiter, government action in the form of consumer protection regulation and supervision is essential to reinforce industry and consumer actions by creating and enforcing clear ground rules to achieve transparency, fair treatment, adequate attention to evolving customer risks, and effective recourse. CGAP has a growing track record of successful engagement with governments in emerging markets and developing economies to help them design pragmatic consumer protection regimes that serve the interests of low-income and inexperienced consumers and can be implemented by financial authorities with relatively limited resources and capacity. CGAP has partnered with Central Banks and other financial supervisors to develop guidance on the key “building blocks” of disclosure, responsible lending, and recourse. CGAP has also offered preliminary guidance on protecting customers of early “branchless banking” business models.

In many countries, consumer protection laws and regulations are very new or are still in the drafting stages. CGAP has developed practical guidance on how to get started in supervising industry practices and monitoring the market for emerging risks to lower-income and more vulnerable consumers. Given the limited human and financial resources available to consumer protection regulators and supervisors in most countries, CGAP’s work in this area seeks to help financial service providers focus on the most important priorities for improving transparency and protecting base-of-pyramid financial consumers and adopt improved measures based on evidence. CGAP has developed cost-effective consumer research tools to help our policy clients diagnose problems and test solutions. Application of emerging insights from the growing body of behavioral research also helps ensure better real-world outcomes for consumer protection regimes


Resources

Publications

15 August 2017
There is not enough being done to implement minimum standards in consumer protection for digital credit, and this exposes the industry and consumers to risks such as credit bubbles and mass-blacklisting of consumers in credit bureaus for just a few dollars of debt.
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English (24 pages)
15 August 2017
Customers are turning to formal channels that use digital and mobile technologies for remittances because these are often able to offer services at lower costs. As more customers turn to formal services, remittances will have an even stronger developmental impact, notably in countries where protracted humanitarian crises affect large numbers of people.
Countries: 
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English (91 pages)

From Our Blog

A woman in Ghana uses a phone while making food
25 May 2017
3 comments
As mobile money continues to evolve, new kinds of fraud are emerging. Here are some steps that providers and regulators can take to keep up.
02 November 2016
In Kenya, many digital financial service providers do not disclose to consumers the costs of products. On October 29, the Competition Authority of Kenya announced an important new standard for pricing in digital financial services.