ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Regulating Microfinance Institutions

Recent events in India have brought a fresh focus on the appropriate regulatory stance towards microfinance. This paper analyses the puzzles of financial regulation in this field from first principles and argues that mainstream mechanisms of consumer protection and micro-prudential regulation need to be modified. From this perspective, it suggests regulatory strategies that need to be adopted for dealing with microcredit and financial distribution that focus on the poor. This conceptual framework also helps analyse two policy responses, viz, the Malegam Report and the draft Microfinance Bill, 2011.

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