Role of Central Banks
The role of central banks in microfinance is related to their broader role in the financial system and in the economy more generally.
Central banks have a number of objectives:
- tactical or macroeconomic objectives (relating primarily to the domestic price level and the exchange rate);
- long-term strategic objectives of financial sector development (including the development of an effective payments system and other forms of financial infrastructure); and
- sectoral or microeconomic objectives (such as prudential supervision and deposit insurance).