Jaramillo, M. (2014). Innovaciones institucionales y normativas para el desarrollo de las microfinanzas en América Latina (Resumen de Política N° 2). ELLA. Desarrollo Económico, Microfinanzas.

The current performance of the microfinance sector is related to the financial sector reforms in Latin American countries, which started in the late 1980s. Prior to these reforms, the development of microfinance was limited by the excessive regulation of the financial sector, which was mainly based on state involvement. The optimisation of the regulatory framework and the implementation of practices to supervise the sector provided a suitable environment for microfinance institutions (IMF for its acronym in Spanish) to grow, innovate and become global leaders. This paper describes the Latin American experience in IMF regulation, reviewing microfinance laws in the region and the positive effects they have had on the sector’s current performance. It also points to good practices in regulation, risk management and supervision, and offers useful lessons for other regions of the world.