Subject The microfinance activity is recognized as an important development tool that helps enhance the use of financial resources of the society and create additional channels of small business and startup financing. Pawnshops are the most ancient commercial microfinance institutions with a history of more than one millennium. Unlike pawnshops, private microfinance institutions appeared in the former Soviet Union only about 20 years ago, therefore, the law principles regulating their activities are of special interest. To harmonize the laws of the EAEU States on microfinance institutions regulation, it is required to discuss and coordinate available approaches. Objectives Based on the analysis of statutory regulation of commercial microfinance institutions in EAEU countries, the study aims to unveil similarities and differences in the existing approaches and to find ways to mitigate systemic risks inherent in their operations. Methods The paper employs the following methods: historical comparison, logic, comparative analysis, synthesis, induction and deduction. Results The findings reveal the most significant differences in the regulation of microfinance institutions of EAEU countries. The study proves that the risks of microfinance institutions are increasing as their operations expand. This necessitates toughening the supervisory requirements of the regulator. Conclusions It is practicable to harmonize the laws regulating the pawnshop activities, however, approaches to the regulation of microfinance institutions require a thorough discussion and coordination of positions with a view to mitigate possible risks.
Keywords: pawnshop, microfinance organization, government regulation, financial risk, EAEU
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