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Citation Information

Type Thesis or Dissertation - Doctor of Philosophy in Development Finance
Title An impact assessment of the regulation of microfinance institutions in Namibia
Publication (Day/Month/Year) 2016
URL http://scholar.sun.ac.za/handle/10019.1/100206
This study aimed at contributing to the current debate on the regulation of microfinance
institutions (MFIs), through providing important inputs for evidence-based policy dialogue
and decision making, particularly on the issue relating to whether MFIs should be regulated
and supervised and how they should be regulated. Using the case of Namibia, it entailed a
critical evaluation of the potential impact of regulation on MFIs and hence on the
microfinance sector. Through an application of the Rationale-Objectives-Indicator (ROI)
methodology, an analysis of a regulatory impact assessment (RIA) was performed at two
levels, namely an ex-post level using a case study of a deposit-taking MFI that has been
regulated under conventional banking law and an ex-ante level of the likely impact of the
proposed microfinance regulatory framework. It was found that regulation has generally had
a positive impact on the operations of the regulated MFI, as reflected in improvements in
most of its performance indicators (profitability, portfolio quality, liquidity and access to
finance, given substantial increases in the number of savers and borrowers) during the postlicensing
period. The ex-ante RIA of the proposed new microfinance regulatory framework
also pointed towards a greater probability of the envisaged regulatory framework achieving
its intended regulatory objectives. This will however depend on the degree to which
regulatory requirements are going to be enforced and the prevailing macro-economic
conditions in the country. As such, it was concluded that, while necessary, regulation alone
may not be sufficient to attract relevant players into the microfinance sector and develop the
sector, given the structural weaknesses of the Namibian economy. Broader policy and
reform initiatives, including additional incentives, might be required to spur the development
of the country’s microfinance sector.

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