The importance
of microfinance
Background
Poverty in Asia 3
Poverty reduction and microfinance 5
The development of a microfinance sector 8
Current outreach and self-sufficiency of microfinance institutions 10
Summary 12
Arrangements
for direct support 14
Background 14
Support for individual microfinance institutions 15
The role of second tier microfinance institutions 18
Support through the banking system 24
Programs operated directly by government agencies 34
Summary and recommendations 36
Regulation of
non-bank microfinance institutions 41
Background 41
The broad regulatory framework 41
Interest rates 47
Prudential regulation and supervision 49
Performance and reporting standards of second tier institutions 52
Self regulation 59
Savings mobilisation and deposit taking 63
Summary and recommendations 66
Regulation of
banks 71
Background 71
Licensing and minimum capital requirements 73
Interest rates 77
Prudential regulation and supervision 78
Summary and recommendations 81
