Evolution of Legal and Regulatory Frameworks of Microfinance in Brazil

Bhabani Nayak, Ronaldo Silva

Research output: Contribution to journalArticle

Abstract

This study argues that a strong legal and regulatory framework can contribute to the expansion of microfinance in Brazil. The paper outlines the regulatory framework in the enhancement of microfinance in Brazil. The paper reviews different patterns of regulation and supervision for the success of microfinance in Brazil. The findings suggest mixed results in terms of the impact of the current legal and regulatory framework on microfinance in Brazil. The paper argues that stringent regulatory regime and rules have limited the growth of most microfinance institutions and the segment has developed a strong dependency in public funding. Hence, the paper argues that there is a need for the right balance between freedom, for the sustainable growth of the MFIs, and the correct dose of monitoring, in order to maintain the public confidence of MFIs. The paper outlines the defining characteristics of the Brazilian microfinance sector and discusses the possible gaps in the current regulatory framework, as well as the best practices that could contribute to the effectiveness in the supervision and regulation of microfinance in Brazil.
LanguageEnglish
Pages(In-press)
JournalLatin American Policy
Volume(In-press)
Publication statusAccepted/In press - 1 Feb 2019

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microfinance
Brazil
supervision
regulation
best practice
confidence
funding
monitoring

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Evolution of Legal and Regulatory Frameworks of Microfinance in Brazil. / Nayak, Bhabani; Silva, Ronaldo .

In: Latin American Policy, Vol. (In-press), 01.02.2019, p. (In-press).

Research output: Contribution to journalArticle

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