Carla Candelaria Camacho Fernandez, Ilse Junieth Olivas Moran

• This study examines how credit risk regulation affected the performance of microfinance institutions in Nicaragua from 2014 to 2022. Utilizing data from the regulatory body, for 12 microfinance institutions (MFIs), the analysis employs regression models to assess the relationship between regulatory changes and Operational Self Sufficiency (OSS), considering MFI-level controls and macroeconomic factors. Findings suggest that increased regulation negatively influences MFI profitability, as indicated by a significant negative effect of credit risk regulation (represented by NEW_REG) on OSS.