Following the recent global financial crisis there is a growing interest
in alternative finance - and microfinance in particular - as new
instruments for providing financial services in a socially responsible
way or as an alternative to traditional banking. Nonetheless,
correspondingly there is also a lack of clarity about how to regulate
alternative financial methods particularly in light of the financial
crisis' lessons on regulatory failure and shadow banking's risks.
This book considers microfinance from a legal and regulatory
perspective. Microfinance is the provision of a wide range of financial
services, particularly credit but also remittances, savings, to
low-income people or financially excluded people. It combines a business
structure with social inspiration, often resorts to technological
innovations to lower costs (Fintech: e.g. crowdfunding and mobile
banking) and merges with traditional local experiences (e.g. financial
cooperatives and Islamic finance), this further complicating the
regulatory picture. The book describes some of the unique dimensions of
microfinance and the difficulties that this can cause for regulators,
through a comparative analysis of selected European Union (EU)
countries' regimes. The focus is in fact on the EU legal framework, with
some references to certain developing world experiences where relevant.
The book assesses the impact and validity of current financial
regulation principles and rules, in light of the most recent
developments and trends in financial regulation in the wake of the
financial crisis and compares microfinance with traditional banking. The
book puts forward policy recommendations for regulators and policy
makers to help address the challenges and opportunities offered by
microfinance.
