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Volume 2
Issue 2
Online publication date 2010-07-16
Title Regulation and supervision of microfinance in Albania
Author Rezart Hoxhaj
Abstract This paper describes important regulation issues that concern microfinance. It starts by considering literature on how and why to regulate and supervise microfinance. Considering the specific case of microfinance in Albania, it analyzes the context of this industry and some particular issues that might influence its growth. Related regulation in Albania seems to be not activity–oriented since a real definition of microfinance is lacking in the Albanian law. Therefore, Albanian microfinance sector needs, first of all, a microcredit and microfinance definition to implement the right development policies and avoid confusion and license misuse. Moreover, the regulatory framework seems to be too restrictive for institutions supposed to be engaged in microfinance example high capital requirement and provisioning. Possible interventions can be in lowering minimum capital requirements for NBFIs to improve entrance, simplifying procedures, documentation and harmonization of the taxation treatment of institutions to enhance development, encourage access and avoid market distortions. There is the need to implement regulation considering microfinance as an activity, and develop a regulatory framework to induce commercial banks integrate downward into the microfinance market and help informal start-ups institutions develop and get formalized.
Citation
References
Chavez, R., Gonzalez-Vega, C., 1993. “Should principles of regulation and prudential supervision be different for microenterprise finance organizations?” GEMINI Working Paper, No38

Colleye, P., 2005. “The World Bank’s “unorthodox” approach to credit union creation in Albania and Moldova, ” Access Finance, issue No7, World Bank

CGAP, 2003. Microfinance consensus guidelines: Guiding principles of regulation and supervision of microfinance

Gannon, M., 2005. Regulation and supervision of  Albania’s Microfinance industry, Building supervisory capacity for credit unions and MFIs, Essays on regulation and  supervision, IRIS Center

Medgeher, P., 2002. Microfinance regulation in developing countries: Acomparative review of current practice, IRIS Center

Republic of Albania, On “Credit Savings Associations and Their Unions,”  Law No.8782

Republic of Albania, Regulation on the supervision of Credit Savings Associations and Their Unions, decision no.67, l Law No.8365

Republic of Albania,On Banks in the Republic of Albania, Law No.9662  

Rosenberg, R., Lyman, T., Christen, R., 2003. Guiding principles on regulation and supervision of Microfinance, CGAP

Valenzuela, L., Robin, Y., 1999. Consultation on regulation and supervision of microfinance: A workshop report, USAID

Van Greuning, H., Gallardo, J., Randhawa, B., 1999. A framework for regulating microfinance   institutions. Policy Research Working Paper, World Bank 

Vogel R, Gomez, A.,  Fitzgerald, T., 2000. Microfinance regulation and supervision concept  paper, USAID

World Bank, 2005. Albania Microcredit project, World Bank Report, No.34627

World Bank, 2008. Microfinance institutions and credit unions in Albania: Regulatory, supervisory and market development issues

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Keywords Microfinance institution, regulation, supervision, credit union, non-bank financial institution.
DOI http://dx.doi.org/10.15208/beh.2010.19
Pages 75-81
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