Brooklyn Journal of Corporate, Financial & Commercial Law


Microfinance seeks to eradicate poverty through the economic growth and development that results when seed capital is given to microenterprises. In 2015, Latin America’s microfinance loan portfolio totaled $40 billion USD and included more than twenty-two million borrowers. Due to the current state of microfinance in the region—abusive lending practices and betraying the original goal and purpose of eradicating poverty—this Note advocates for a regional regulatory body, such as the Latin American Microfinance Association, that would develop and assist Latin American countries to implement model legal frameworks that increase client protection, create licensing requirements, establish interest rate caps, and recognize microfinance institutions as part of the formal lending sector. This framework is based on the recommendations of Verónica Trujillo-Tejada, Victoria Muriel-Patino and Fernando Rodríguez-López (TMR Guidelines). The suggested model framework balances the interests of “financial stability, resilience, integrity, and consumer protection with the need to preserve financial inclusion, innovation, and healthy competition.” Additionally, this Note offers a comparative legal analysis and critique of the current regulatory frameworks in Latin America, particularly in Bolivia, Brazil, the Dominican Republic, and Nicaragua.