ABSTRACT
Microfinance is an interesting form of finance with social inspiration, challenging traditional legal categories and existing regulations. The 'microfinance' currently refers to a varied set of activities having in common that they target a low-income population, but they can be offered by operators with very different legal forms and be subject to multiple laws. Microfinance is no single minded, like traditional banks. It does not seek only profit maximization, but also to serve 'the poor'. Social objectives must be pursued effectively and how to measure its effectiveness is a daunting task, but one that needs to be considered by regulators. Furthermore, regulation must be careful in limiting microfinance institutions (MFIs) permitted activities because this could endanger the effects of financial inclusion. Microfinance is also a business venture, and therefore it must be economically sustainable, having adequate funds. Microfinance has absorbed other alternative and innovative financial inclusion instruments, such as crowd funding and mobile banking.
