Criticism Over Microfinance Bill

Analysts say that the regulations contained in the bill issued by the Guatemalan Superintendency of Banks are restrictive for the sector.

Wednesday, October 12, 2011

Byron Dardón in his article for La Prensa Libre interviewed Cesar Stump, director of the Rural Development Cooperation of the West and an analyst from the Association of Social Economic Research (ASIES), Carlos Gonzalez.

An extract from the interview with Caesar Stump where he referred to the new draft as "restrictive legislation" follows.

"What do you think of the proposal to regulate the microfinance sector in the country?

The Superintendency of Banks has not seen the impact that microfinancing activities have had in the country, seeing as they have now been running for over 35 years. This not only refers to the financial education of small producers and small businessman, but also the role that these have had on their communities.

At no time are we talking about providing a boost –to the sector – instead it is merely generating small "mini-banks" It is a restrictive legislation.

If you look at the Law on Banks and Financial Groups, instead of $ 12 million or $ 15 million, an MFI will have to have a minimum capital of $5 million in order to be officially established. "

According to Carlos Gonzalez "we need to regulate them."

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