The multilaterals have the skills and expe- The U.S. should also use its diplomatic influ- The U.S. can
rience to promote financial inclusion. The U.S. ence and aid resources to promote the develop- should seek to expand their capacity to offer ment of regulatory climates in Latin America smooth the
technical assistance on regulatory frameworks that are conducive to the growth of competi- way to broader
and credit reference systems that are necessary tive financial services markets. Some of the financial access
for private banks to enter these markets. The most formidable obstacles to the growth of the by easing its
new administration should make it clear to the microfinance industry are caused by govern-multilaterals that helping to develop the right ments that both over- and under-regulate— enforcement of
financial and regulatory infrastructure in target sometimes simultaneously. Ways in which stringent “know-
countries is a U.S. policy priority. national governments can choke off growth of your-customer”
As the market develops, competitors mul- an inclusive financial industry include impos-
tiply and lower-income Latin Americans find ing interest rate ceilings, launching government r:ules. their options for credit and other financial ser- microfinance banks, and bringing bank supervi- vices expanding, the multilaterals should also sion into the orbit of political leadership. Gov- seek to support financial literacy programs ernments also often make it too difficult for
to help ensure that the newly banked do not lending institutions to accept deposits, a major
become over-indebted or purchase services ill- engine of growth for the banks, as well as of
suited to their needs. wealth accumulation for the populace. Sadly,
