While effective external regulation and supervision from regulatory bodies are important to the health of microfinance sector, no amount of external oversight can replace accountability that stems from proper governance and supervision performed by the owners and directors of financial institutions.
Standards, disclosure requirements and codes of conduct of associations of providers of microfinance services are common tools to enhance transparency.
Accounting standards and external audit requirements serve to push microfinance institutions to produce better accounts, clearer and more comprehensive financial information, and improved management and control systems.
Disclosure requirements (and voluntary disclosure through standardized performance reports) not only increase transparency but also are an incentive to improve performance, notably, when benchmarking is involved.
Here encourage adherence to principles and best practices of good corporate governance in microfinance sector. Enhance accountability, fairness and transparency among all actors involved in the microfinance sector.
National microfinace policy October 2017