The Impact of Regulatory Reform on Microfinance Performance and Protection in Kosovo
Session
Management Business and Economics
Description
This research employs a combination of qualitative and quantitative methods to examine how the quality of regulation affects the financial performance of non-bank microfinance institutions (MFIs) in Kosovo. The qualitative part reviews laws, institutional reports, and recent literature. It identifies regulatory gaps that come from divided responsibilities between the Central Bank of Kosovo (CBK) and the NGO Registration Office. These gaps weaken supervision and reduce client protection. The quantitative part introduces a new measure, the Regulatory Quality Index (RegIndex). This index is based on three elements: transparency in effective interest rates, the presence of independent audits, and clarity of supervisory mandates. Using quarterly data from 2019 to 2023, the study finds that higher regulatory quality is positively and significantly related to the return on average assets (ROAA). This result suggests that stronger regulation helps improve the financial sustainability of MFIs.The research also compares Kosovo with Tunisia, Peru, the Philippines, and Uganda to draw lessons about unified supervision, consumer protection, and digital transformation. The findings show the need to align financial and social objectives, including gender inclusion and rural outreach. The study recommends closer supervisory integration and the adoption of international standards for consumer and digital finance regulation.
Keywords:
Microfinance; Kosovo; financial regulation; supervision; RegIndex; ROAA; FinTech; financial inclusion
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-982-41-2
Location
UBT Lipjan, Kosovo
Start Date
25-10-2025 9:00 AM
End Date
26-10-2025 6:00 PM
DOI
10.33107/ubt-ic.2025.402
Recommended Citation
Vranovci, Shpresim, "The Impact of Regulatory Reform on Microfinance Performance and Protection in Kosovo" (2025). UBT International Conference. 17.
https://knowledgecenter.ubt-uni.net/conference/2025UBTIC/MBE/17
The Impact of Regulatory Reform on Microfinance Performance and Protection in Kosovo
UBT Lipjan, Kosovo
This research employs a combination of qualitative and quantitative methods to examine how the quality of regulation affects the financial performance of non-bank microfinance institutions (MFIs) in Kosovo. The qualitative part reviews laws, institutional reports, and recent literature. It identifies regulatory gaps that come from divided responsibilities between the Central Bank of Kosovo (CBK) and the NGO Registration Office. These gaps weaken supervision and reduce client protection. The quantitative part introduces a new measure, the Regulatory Quality Index (RegIndex). This index is based on three elements: transparency in effective interest rates, the presence of independent audits, and clarity of supervisory mandates. Using quarterly data from 2019 to 2023, the study finds that higher regulatory quality is positively and significantly related to the return on average assets (ROAA). This result suggests that stronger regulation helps improve the financial sustainability of MFIs.The research also compares Kosovo with Tunisia, Peru, the Philippines, and Uganda to draw lessons about unified supervision, consumer protection, and digital transformation. The findings show the need to align financial and social objectives, including gender inclusion and rural outreach. The study recommends closer supervisory integration and the adoption of international standards for consumer and digital finance regulation.