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International Conference on Rural Finance Research: Moving Results into Policies and Practice

International Conference on Rural Finance Research: Moving Results into Policies and Practice. The Impact of Regulatory Policies on Provision of Financial Services to the Poor. Objective of the study, relevance to conference and theme.

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International Conference on Rural Finance Research: Moving Results into Policies and Practice

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  1. International Conference on Rural Finance Research:Moving Results into Policies and Practice The Impact of Regulatory Policies on Provision of Financial Services to the Poor

  2. Objective of the study, relevance to conference and theme To assess how regulation impacts the delivery of micro-finance services to the poor in rural areas and the lessons for policy makers seeking to design supportive policy frameworks.

  3. Hypotheses, key research questions studied • What has helped to shape regulation? • Does micro-finance work better with or without regulation? • Does regulation increase the cost of service delivery and typically leave out the poor? • How can one design regulation to better serve the poor?

  4. What shapes regulation? • Underlying philosophy • State • Civil Society • Genesis of the sector institutions • Policy • Culture • Operations

  5. What shapes regulation? Balancing competing demands • Access and Outreach • directed subsidized lending vs a financial sector approach) • Poverty Alleviation • loan size, interest rates, collateral • Types of Services • loans • Savings • Transfer services

  6. What Shapes Regulation?Competing Perspectives • Regulatory Authorities • Protection of Depositors • Security (branch operations) • supervision mechanisms • Micro-Finance Providers • Cost of operations • Sustainability • Repayment • Collateral

  7. What shapes regulation?Balancing Competing Demands • Rural vs Urban • Poor vs Non-poor

  8. Does regulating the sector leave out the poor? Disadvantages • Cost of operations increases (MCR, CAR, PAR) • Proportion of assets in high-return loan portfolio • Taxation • Interest rate barriers • Reporting requirements • Volume of funds?

  9. Does regulating the sector leave out the poor? Advantages • Types of services • Protection of clients • Source of financing • Cost of financing • Loan size • Interest rate ceilings

  10. Projected Growth of Selected Micro-Finance Institutions in Pakistan

  11. Does micro-finance work better with or without regulation?

  12. Market Share of Micro-Finance in Pakistan

  13. Where is growth coming from?

  14. Where is growth coming from?

  15. Where is growth likely to come from? • Transformation of NGOs into banks • Niche micro-finance banks

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