The Legal Environment for Microfinance Activity in Russia: Analysis and Recommendations for Reform

This paper presents a research of legal environment that requires amendments with regards to microfinance activities and adopting new acts. The paper analyzes:

• Relevant Russian legislations regulating microfinance activities;
• Gap identification;
• Inconsistencies and barriers towards development of microfinance;
• Practice of microfinance institutions (MFIs) in applying laws and regulations.

The sub-sections of the paper are as follows:

• Normative regulations of microfinance activity;
• Legal forms of organizations that engage in microfinance activities;
• Lending and loan security;
• Taxation of microfinance activities;
• The possibility of transforming and participating in the establishment and operation of other organizations.

The paper concludes by proposing guidelines for promoting legal reforms for MFIs belonging to different stages. The author also highlights the need for immediate and long term reforms that are needed to create favorable regulatory atmosphere for microfinance development.