Can Legal Frameworks & Regulation Interference Orchestrate Innovation?-Mr. Kingsley Ughe


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The presentation is Mr. Kingsley Ughe, Consultant, Consultancy Africa Intelligence from the just concluded African Round Table & Conference on Corporate Sustainability and Responsibility (AR-CSR™), which held in Tinapa Business Resort, Calabar, Cross River State between 20 to 21 June, 2013.

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Can Legal Frameworks & Regulation Interference Orchestrate Innovation?-Mr. Kingsley Ughe

  1. 1. Legal Frameworks and Regulatory Intervention and Innovation Mr. Kingsley Ughe Consultancy Africa Intelligence
  2. 2. Purpose of Legal & Regulatory Intervention. • To move towards a government controlled structure for reaching un-served or under- served portions of a country’s population. Cases: • India • Nigeria • United States
  3. 3. Key Innovations in India • non-governmental organizations which were serving as ad- hoc microfinance institutions in the absence of true servicing of the financial borrowing and saving needs of the poorest sections of the populations. • target populations for development via microfinance stimulation in India had little or no trust for the governmental institutions that existed. • These organizations were able to use this tendency to leverage their position with the regulatory bodies to facilitate their acceptance as registered approved financial institutions and increase their access to the kind of capital they would need to see large-scale growth.
  4. 4. Key Innovations in Nigeria • The informal, non-governmental institutions and community banks were also the primary source of microfinance services; • Newly imposed legal and regulatory frameworks have done little to change the situation; • African businesses are driven by small scale industry. Regulatory frame work in Nigeria appears not to be driven by innovation but by the desire to sell and disburse licenses.
  5. 5. Key Innovations in America • Microfinance regulations in place for years created a boom in development, home business ownership, and empowerment of the lower income members of the population; • However, America suffered a massive failure of microfinance institutions that ended many of those same organizations that were able to grow themselves and thrive a few years before.
  6. 6. Cases Cont’d • In India, the local, small-scale lenders servicing a disillusioned population were able to translate their pre- regulation position in the community into a near-monopoly on microfinance products during the transitional phases at least; • In Nigeria, the failure of government institutions to provide appropriate services secured the place of the non- government organizations in the community in anticipation of better regulations; • In America, small debt-relief companies were able to take advantage of the new legal framework designed to help people recover from that failure. They transformed themselves into champions of the rescue effort and capitalized on the disillusionment of the population with the institutions that previously held their confidence.
  7. 7. Conclusion In each case, the cultural and social structures that had developed in response to the financial climate found new opportunities for re-invention and growth within the new regulations shaped by an emergent "common cause" paradigm. In each case, cultural defense mechanisms provided opportunities for innovation.