Regulatory Alerts2024-09-01
On the Mandatory Minimum Capital of Financing and/or Guarantee Institutions Issued Pursuant to the Regulation on Entities Operating in Burundi Providing Financing and/or Guarantee Services
The Bank of the Republic of Burundi mandates a fully paid minimum cash capital of ten billion Burundi Francs (10,000,000,000 BIF) for all financing and guarantee institutions operating in the country. This capital must be deposited into a dedicated financial institution account prior to license application and retained until operational commencement. The circular, effective upon publication on the Central Bank’s website and in the Official Gazette, formally defines guarantee institutions as entities providing signed credit endorsements or guarantees, and financing institutions as those refinancing loans through long-term market or development partner resources.
BANK OF THE REPUBLIC OF BURUNDI
THE GOVERNOR
CIRCULAR NO. 01/2024 ON THE MANDATORY MINIMUM CAPITAL OF FINANCING AND/OR GUARANTEE INSTITUTIONS ISSUED PURSUANT TO THE REGULATION ON ENTITIES OPERATING IN BURUNDI PROVIDING FINANCING AND/OR GUARANTEE SERVICES
Pursuant to Law No. 1/34 of December 2, 2008 establishing the statutes of the Bank of the Republic of Burundi;
Pursuant to Law No. 1/09 of May 30, 2011 establishing the Code of Private and Publicly Participated Companies;
Pursuant to Law No. 1/17 of August 22, 2017 governing banking activities.
Pursuant to Regulation No. 004/2024 of April 12, 2024 on entities operating in Burundi providing financing and/or guarantee services
The Bank of the Republic of Burundi, hereinafter referred to as the "Central Bank", hereby issues:
Article 1: Object
This circular aims to specify the minimum capital required for financing and/or guarantee institutions.
Article 2: Definitions
For the purposes of this circular, the following terms apply:
Guarantee Institution: any institution whose purpose is to take, for valuable consideration and in the interest of a natural or legal person, a signed commitment such as an endorsement or guarantee for loans granted by credit institutions or microfinance institutions or any other entity authorized by the Central Bank to conduct credit operations;
Financing Institution: any institution whose purpose is the refinancing of loans granted by credit institutions and microfinance institutions or any other entity authorized by the Central Bank to conduct credit operations, to their clients by mobilizing long-term resources on financial markets or from development partners.
Article 3: Required Minimum Capital
The minimum cash capital of Ten Billion Burundi Francs (10,000,000,000 BIF) must be fully paid up prior to the submission of the approval application dossier and must remain in the same account opened at a financial institution until the commencement of operations.
Article 4: Entry into Force
This Circular enters into force on the day of its publication on the Central Bank's website and in the Official Gazette of Burundi.
Done at Bujumbura, on April 12, 2024
Edouard Normand BIGENDAKO
Governor. — Governor
- Government Avenue - P.O. Box 705 BUJUMBURA - Tel: (257) 22-20 40 00 / 22 22 27 44 - Fax: (257) 223128 - Email: brb@brb.bi