Promoting Inclusive Markets and Financial Systems
Developed by SEEP’s Consumer Protection Working Group in 2003, this technical note set the stage for industry-led self-regulation in microfinance. It examines how nonprudential self-regulation has helped other industries, especially the financial services industry in the United States, win the trust of consumers and avoid heavy-handed and costly regulation. The technical note begins by providing the background of the consumer movement and the response of business to consumer issues. The review of other industries focuses particularly on the United States because of the availability of materials, with some reference to the international consumer movement and some examples from other countries. Both the consumer perspective and the business perspective are described to emphasize their fundamental difference in approach to consumer protection: the former operates through government regulation, the latter through industry-sponsored self-regulation.