Lack of legislation for microfinance institutions in Central America

One of the main obstacles to the development of microcredit institutions in the region is the lack of a legal framework to integrate them in to the formal financial system.

Friday, August 29, 2008

Reynold Walter, president of the Microfinance Network of Central America (Redimif) and who inaugurated the sixth edition of the Central American Microfinance Conference yesterday, commented that, except for Honduras, no other country has a legal framework for that sector.

More on this topic

The Lesson is Clear: Debts Must Be Paid

September 2012

The microfinance sector in Nicaragua, once the best in the region, is just beginning to overcome the deep crisis caused by the ‘No Pago’ (Non-Payment) movement.

In her article in Laprensa.com.ni, Gisella Channels Ewest notes that "In the two decades of its existence the microfinance sector in Nicaragua it has never faced a crisis as profound as that caused by the movement of producers and traders from the North. '

Guatemala Needs Standards for Microfinance

January 2011

A law regulating the microfinance market would open the opportunity to capture savings that currently can only be done through cooperatives and banks.

The article by Byron Dardón in Capital.com.pa, reports that the bill on microfinance is expected this year and has the support of the Financial Inclusion Program of the Treasury of the United States, which promotes the adoption in Latin American countries of market governing rules.

Nicaragua's Country Risk Affects Micro-financing

August 2010

The "No Payment" movement is scaring US and European investors, threatening the arrival of $70 million worth of funds for micro finance companies.

"In the last Central American Microfinance Conference the challenges and opportunities faced by the sector were discussed and the Guatemalan moderator, Reynold Walter, concluded by highlighting that governments should discourage 'no payment' movements, which received a round of applause from the attendees.

Credit to micro-finance institutions increases in Central America

August 2008

Despite a less favorable macro-economic environment, the credit portfolio of the micro-finance sector in Central America grew 28% in 2007 in comparison to the previous year.

Reynold Walter, president of the Central American Network of Micro-Finance Institutions (Redcamif), reported that in 2007 some 99 micro-finance institutions from Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama granted loans worth US$676.6 million to 814,344 micro-businesses.

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