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Rural Banking: Designing An Effective Legal Framework For Microfinance, Ian Davis

The Journal of Business, Entrepreneurship & the Law

Approximately 1.2 billion people live in extreme poverty, surviving on less than $1 per day. In emerging markets, commercial banks generally serve only ten to twenty percent of the population, excluding eighty to ninety percent of the population from the formal financial sector. Many in this "un-banked" population could benefit from access to financial services. In most developing countries, rural financial markets are based partially on a foundation of law and partially on a non-legal foundation of extra-legal (and sometimes illegal) activities. These legal and non-legal foundations directly influence the operation of rural financial institutions. This comment will discuss the …