Policy Change: Experience in the WWB Network

This paper sets out key features essential to build financial systems that work for microfinance across the world. The paper highlights country cases that have been instrumental in introducing appropriate microfinance policies, regulations and legal structures.

The paper elaborates key parameters essential for favorable policy environment:

• Build a sound and responsive microfinance sector by forming positive regulations and encouraging private institutions to set-up sustainable services;
• Liberalize interest rates and allow institutions to charge what it costs to them to provide sustainable financial access to the poor;
• Recognize the role of regulated and unregulated institutions in fostering microlending by government institutions;
• Networks, rating agencies and financial institutions play a lead role in setting industry standards and transparency among microfinance institutions;
• Regulatory and apex institutions address special microfinance issues to encourage financial institutions to pursue microfinance;
• New and modified regulations cater to newly created institutions, specifically small organizations working on microfinance.

The paper discusses the main areas where policy changes are needed, and also the following areas where Women's World Banking (WWB) has been successful in bringing out policy changes:

• Follow the policy of "knowledge of issues comes first"?;
• Work locally;
• Build consensus;
• Define a concrete agenda for change;
• Catalyze champions for change;
• Use a variety of methods for moving forward the policy agenda.

The paper concludes by highlighting some of the following:

• Favorable factors which have provided impetus to policy changes across the world;
• Characteristics of WWB's policy work for the coming years.