There is no systemically established legal system for microfinance in Taiwan. However, in order to relieve vulnerable people from financial difficulties as well as to encourage growth of small business, scholars and civic groups have been studying successful programs in other counties. The hope is to promote the establishment of a microfinance system in accordance to Taiwan’s unique social, economic, political and cultural background and features.
Prior to these efforts, there were some measures and regulations to help relieve vulnerable people from poverty and achieve economic independence. These measures and regulations differ from microfinance in other countries due to fiscal concerns and the differences in attributes, even though they shared the same purpose.
For example, as to loans issued by the Farmers & Fishermen Association, creditors are legal entities and applicants are required to meet certain status or qualifications and to pay lower interest rate, which is comparable to Microfinance coupled with guarantees. However, Bidding Society (a form of ROSCA) are private organizations without government supervision, and they engage in group lending based on trust relationship. Student loans are intended to help students with financial difficulties and students without stable income after graduation. In addition, student loans are responsible for increasing citizen’s level of education and literacy and thus strengthening earning capability. Hence, such loans bear very low interest requirements, and work as a cooperation mechanism between the government and private banking institutions.
The measures and regulations stated above in Taiwan are governed by various supervision agencies due to the differences in their characteristics.
Microfinance & Banking
- Agricultural Development Act (Amended in 2010) (Chinese-Traditional /English)
- Bid Society- Rotating Savings and Credit Associations (Enacted in 1999) (Chinese-Traditional /English)
- Micro-insurance Regulation (Enacted in 2009) (Chinese-Traditional)
- Financial Consumer Protection Act (Enacted in 2011) (Chinese-Traditional /English)