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Proportionality Issues on the Regulation of the Institutions Relevant to Financial Inclusion

Yury Kondrashin – Research fellow of the Department for Financial Studies of the Gaidar institute. Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Michael Khromov – Head of Department for Financial Studies of the Gaidar Institute; Senior Research fellow of the Center of Structural Research, Institute for Applied Economic Studies, Russian Presidential Academy of National Economy and Public Administration. Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Issues on regulation and supervision of the microfinance market is vital for financial inclusion thus for the socio-economic growth. Nevertheless choice of the right policy is a tricky question and proportionality concept is a way to find balance between stability and development.

Deep knowledge and comprehension of the international standards and principles relevant to proportional creditors’ regulation is obligatory to find correct policy solutions. There are summary issues in the article on international materials, expert opinions and authors’ advice on standard setting bodies’ principles implementation into national legislation. In this regard policy makers, market experts and participants may find in the paper answers on the questions relevant to the proportionality concept.

Key words: microfinance institutions, proportionate regulation, prudential supervision, financial system, international standards.