Role of Regulation in Micro Finance: Application of the Micro Savings Requirement Scheme in Informal Sectors
Marianne Ojo *
Faculty of Commerce and Administration, North-West University, South Africa
*Author to whom correspondence should be addressed.
Abstract
This paper not only addresses how linkages, direct and facilitating linkages, can benefit microfinance institutions – and particularly in jurisdictions where the Savings Group Outreach involvement is particularly low, but also illustrates ways and means whereby group lending and other more recent innovative methods used by micro lenders to secure repayments, could increase the desired effects, efficiency and impact of microfinance in selected jurisdictions. In so doing, it addresses some of the existing and persisting problems of micro finance in rural areas.
An innovative aspect of the paper is evidenced through its recommendation of the Micro-Savings Requirement Scheme - which offers numerous benefits – as will be highlighted in this paper.
Keywords: Microfinance, regulation, agency theory, micro-savings requirement scheme