bank e-money issuers to protect against liquidity risk and loss of customer funds. The electronic money indicator measures the entry and operational requirements for non-bank institutions issuing e-money. It covers the licensing and operational standards, as well as requirements on safeguarding funds collected by non-bank e-money issuers.

Lacking a legal system governing the use of movable collateral has been a constraint for small businesses and households at the low-income level to obtain a loan (World Bank, 2013). The movable collateral indicator has two dimensions: warehouse receipt and getting credit. Warehouse receipt is an effective financing tool for creating liquidity and easing access to credit. An appropriate legal framework is a prerequisite for a functioning warehouse receipts system. Legislation protects the rights of depositors and lenders and facilitates easy enforceability of the security (i.e. a few days after the default, without court intervention) and, thereby, makes warehouse receipt good collateral (EBRD, 2004). The warehouse receipt sub-indicator covers the existence and scope of rules regulating warehouse receipts systems, including insurance and other performance guarantee requirements for warehouse operators, and the form and content required for legally valid receipts. The getting credit sub-indicator uses data from the Doing Business data set and measures the legal rights of borrowers and lenders in secured transactions and bankruptcy laws and the strength of credit registries and bureaus.

Data collected have shown that regulations for deposit-taking MFIs have been established in 33 countries of the sample. Financial cooperatives are regulated in 56 of the sampled countries either through a general cooperative law or a specific financial cooperative law. Most countries establish capital adequacy requirements for MFIs as a stabilization and protection mechanism. Though less than 50% of the sampled countries have established a capital adequacy ratio requirement for financial cooperatives, other risk management options, such as reserve ratio and insolvency ratio, are common. It is worth noting that less than half of the countries with legislation on MFIs and financial cooperatives require those institutions to disclose the full cost of credits to customers. Furthermore, although a majority of countries require traditional banks to participate in a deposit insurance scheme, only 14 countries in the sample also require MFIs and only 11 countries require financial cooperatives to enroll. Regulations on agent banking and e- money have not caught up with the boom of branchless banking activities. Only 27 countries in the sample have a legal framework for agent banking, and among them, only 15 allow individuals as well as businesses to act as banking agents. Of the 56 countries with laws on e-money, only two-thirds allow non-financial institutions to issue e-money (Figure 2). Romania and Colombia score high in e-money – they both allow non-financial institutions to issue e-money, require e-money institutions to safeguard customer funds at a prudentially regulated financial institution and protect e-money balances under the deposit insurance system. Legal frameworks for warehouse receipts (WHR) are still uncommon. Only 35 countries have a legal framework for warehouse receipts and most do not have stand-alone regulations governing WHR systems: 7