Microfinance regulation and social sustainability of microfinance institutions: the case of Nigeria and Zambia

Siwale, J. ORCID: 0000-0002-6315-0896 and Okoye, N., 2017. Microfinance regulation and social sustainability of microfinance institutions: the case of Nigeria and Zambia. Annals of Public and Cooperative Economics. ISSN 1370-4788

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Abstract

This study examines the effect of regulations on microfinance institutions in Nigeria and Zambia by focusing on the post-regulation experiences and reflections of the microfinance institutions (MFIs) and their regulators. Based on in-depth interviews with the Central Banks as regulators, MFI managers, practitioners and apex microfinance associations, the study finds that regulations in both countries have managed to professionalize the sector, but their effectiveness in augmenting the centrality of social goals to microfinance and MFIs remains doubtful. The poorly designed regulations are not only undermining social goals but also sending wrong signals to would be social investors, with implications for the social image of the industry. The study further finds that regulations have neither speeded the emergence of sustainable MFIs (especially in Zambia) nor accelerated the sectors’ outreach to the poor and the financially excluded. Additionally, considerable levels of political interference and poor regulation have led to unintended consequences to the sector, further frustrating the ultimate goal of extending financial services to the poor. These findings have policy and practical implications for how microfinance engages with the regulatory logic and continues to serve those at the bottom of the pyramid.

Item Type: Journal article
Publication Title: Annals of Public and Cooperative Economics
Creators: Siwale, J. and Okoye, N.
Publisher: Wiley-Blackwell
Date: 9 March 2017
ISSN: 1370-4788
Identifiers:
NumberType
10.1111/apce.12165DOI
Divisions: Schools > Nottingham Business School
Depositing User: Jonathan Gallacher
Date Added: 27 Mar 2017 13:06
Last Modified: 09 Jun 2017 14:13
URI: http://irep.ntu.ac.uk/id/eprint/30453

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