This strengthens the need to find ways to identify or produce new assets that can be used as collateral and to mitigate the pro-cyclical consequences of credit ratings and of market valuation.
Microfinance institutions (MFIs) form a different tier of financial institutions that play an active part, through the informal and semi-formal sectors, in savings mobilization and the development of the financial system. These financial institutions that serve the disadvantaged majority equally require the Central Bank’s supervision and some involvement in enhancing their growth.