Regulations for the Microfinance Sector in the Caribbean

Caribbean micro-entrepreneurs as well as small businesses find it difficult to access financing on favorable terms, which limits their ability to grow and develop, which in turn, has a negative impact on the private sector in the region. This project focuses on issues and activities to strengthen the micro-finance institutions (MFIs) in the region under the premise that sound, good performing institutions will be better able to serve their micro-business clients. It examines: (a) the case for strengthening regulation of micro-financing institutions in the region; (b) a comparison of “prudential” versus “non-prudential” regulation; (c) the concept and implication of “self-regulation” and supervision; (d) an analysis of the existing regulatory arrangements for MFIs in each Caribbean country, their effectiveness and how they impact financial services for MSMEs; (e) the sustainability challenges facing various types of MFIs in the region, especially credit unions.