Current Trends in the Regulatory Framework of Microfinance

Abstract

This paper covers the current trends and the embedded challenges of microfinance. Since the global financial crisis erupted in late 2007, it has the regulatory environment of microfinance, and the links between the economy and the performance of microfinance institutions. The paper observes the changes in the correlation between the microfinance industry and the international capital markets, changes in systematic risk of MFIs and increased interest rates. Then, it presents how implementing the adequate regulations can effectively decrease those negative effects. Suggested regulatory framework and recommendation for further development of the global microfinance industry are brought to the fore.