Regulation and supervision of microfinance in Albania

• Authors: Rezart Hoxhaj
• Languages of publication: EN

Abstracts

EN

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.

Keywords

EN

microfinance institution; regulation; supervision; credit union; non-bank financial institution

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Prague Development Center, Czech Republic
• Journal: Business and Economic Horizons
• Year: 2010
• Volume: 2
• Issue: 2
• Pages: 75-81

Contributors

author

Rezart Hoxhaj

• Prague Development Center s.r.o., Bořivojova 1081 / 40, 130 00, Prague 3 - Žižkov, Czech Republic