The Impact of Regulation in Microfinance Institutions' Performance

Abstract

This paper attempts to explore the impact of regulation in Microfinance institutions' main performance. This purposed to explore relationship between two of three main participants, Regulators and Institutions of Microfinance except Clients, which have important role in Microfinance development in the world. Using the case study of the Microfinance regulation in Mongolia, Bangladesh, India and Vietnam, this paper argues that appropriate regulation of Microfinance is critically important to improve Microfinance Institution's Performance indicators, which are Breadth of outreach, Depth of outreach, Portfolio quality, Financial sustainability, Efficiency.

In this paper to assess the impact of Regulation in Microfinance performance, we will explore how Countries' implemented Regulation in order to achieve main Regulation objectives in Microfinance impact to Microfinance Institutions' Performance indicators by doing Regulatory Impact Analysis, particularly Multi-Criteria Analysis. From this result, by determinig which kind of regulation policy is more affect to Microfinance performance, the research therefore concludes with recommendations on to implement appropriate Regulation to improve Microfinance institution's Performance in Mongolia.