Regulation and Supervision of Member-Owned Institutions in Remote Rural Areas
This article draws insights on member-owned institutions' (MOI) regulation and supervision from seven case studies. The selected MOIs, from Asia, Latin America and Africa, operate under a variety of legal and regulatory frameworks. The individual cases were analyzed against a literature review to assess MOI regulation and supervision. Despite differences across countries, it is clear that regulation and supervision affect MOI outreach and their capacity to deliver sustainable financial services to remote rural populations. Study findings indicate that:
- MOIs provide the best access to remote rural poor, and should be encouraged to do so on a larger scale;
- MOIs have emerged and grown without many constraints in all cases;
- Regulation should be considered as grassroots initiatives develop;
- Small MOIs that cash out and are time bound should not be regulated,
- MOIs are identified with cooperatives;
- Innovations in terms of alternative approaches to cooperatives are underway,
- New laws recognizing the nature of MOI activities over their legal status are emerging;
- MOI regulation should be simple, strict, progressive and affordable.
Finally, the article makes recommendations for developing MOI regulation, which includes the commissioning of a multi-stakeholder taskforce.