A Comparison of Microfinance Regulation and Social Protectionism in Argentina and Cambodia

The microfinance sectors of Argentina and Cambodia differ greatly, but can therefore offer insight into the effects of varying levels of regulation within the industry. By comparing data from the two markets and conducting interviews with organizations and individuals, this paper provides a case study, which can be interpreted as an example for other regional markets with similar structures. With a greater number of smaller microfinance institutions, it is challenging for governments to enforce regulation and prevent exploitation of consumers. On the other hand, with the consolidation of banks and NGOs comes stricter regulation for the decreased number of lenders in a microcredit market. Having a regulated microfinance market prevents exploitation of the rural poor, who are often uneducated on financial services and procedures. In addition, this study finds that civil society is essential for the social and financial protection of clients in a microfinance market.