Instruction No. 2022-11/IMF on Standardized Reporting Statements

CENTRAL BANK OF DJIBOUTI

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INSTRUCTION NO. 2022-11/IMF

ON STANDARDIZED REPORTING STATEMENTS

The Governor of the Central Bank of Djibouti,

Having regard to Law No. 118/AN/11/6th L of January 22, 2011, amending the statutes of the Central Bank of Djibouti;

Having regard to Law No. 179/AN/07/5th L of May 16, 2007, regulating microfinance activities in the territory of the Republic of Djibouti;

Having regard to Law No. 117/AN/11/6th L of May 25, 2011, regulating financial cooperatives;

Having regard to the Commercial Code, Book 3 on Company Law;

Having regard to Law No. 119/AN/11/6th L of January 22, 2011, on the establishment and supervision of credit institutions and financial auxiliaries;

Having regard to Decree No. 2018-171/PRE of May 8, 2018, appointing the Governor of the Central Bank of Djibouti.

Orders:

Article 1: Microfinance institutions (MFIs), regardless of their category, must scrupulously comply with the provisions of the MFI accounting framework of the Republic of Djibouti.

Article 2: Each MFI must draw upon the chart of accounts provided by the accounting framework when designing its own accounting plan, taking into account the specifics of its operations.

The creation of accounts must comply with the framework's provisions to enable the aggregation of sector data.

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Article 3: Financial statements must be presented in the formats prescribed by the Central Bank.

Failure to comply with this provision shall result in the rejection of the financial statements.

Article 4: MFIs are required to transmit to the Central Bank monthly, no later than the 10th of the following month:

• The general trial balance;

• The aged trial balance;

• The status of loans to executives;

• The status of loans to employees;

• The list of the twenty largest debtors;

• The list of the twenty largest creditors;

• The status of arrears by credit type;

• The status of risks by economic sector;

• A table presenting at least the following information:

  ✓ Data on the evolution of the number of members or clients; ✓ Savings (outstanding amounts by savings type, number of savers, distribution by gender, etc.); ✓ Credit (number and volume of outstanding credit, distribution of credits by gender, etc.); ✓ The risk portfolio. ✓ The balance sheet ✓ Credit outstanding

Article 5: At the end of each quarter, MFIs are required to transmit to the Central Bank, no later than the 20th of the month following the end of the quarter, in addition to the information specified in Article 4 of this instruction, the uncertified quarterly financial statements and prudential ratios.

Article 6: MFIs are required to transmit to the Central Bank annually, no later than June 30 following the end of the year:

• The financial statements of the preceding fiscal year certified by the Statutory Auditor;

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• The annual activity report, in accordance with Annex 2021-11 regarding the annual activity report of MFIs;
• The annual internal control report.

Article 7: This instruction shall enter into force upon its signature.

Done in Djibouti, on March 14, 2022

The Governor

[Signature and seal of the Central Bank of Djibouti]

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Annex to INSTRUCTION NO. 2022-11/IMF on Standardized Reporting Statements

I- Annual Activity Report of MFIs for the year ….

This report is prepared pursuant to Law No. 179/AN/07/5th L of May 16, 2007, regulating microfinance activities in the territory of the Republic of Djibouti, Law No. 117/AN/11/6th L of May 25, 2011, regulating financial cooperatives, and Law No. 119/AN/11/6th L of January 22, 2011, on the establishment and supervision of credit institutions and financial auxiliaries.

The activity report aims to support the MFI's operations, financial performance, development prospects, and action plan. It must be prepared at least once a year.

The activity report, which serves as the report for the annual general meeting, allows tracking of the missions and actions undertaken by the MFI to achieve its objectives. It also facilitates communication with the deliberative body, namely the Board of Directors, in a clear and simple manner.

It shall be structured according to the following axes:

1. Governance: Composition of the Board of Directors, key figures, notable events, organizational chart,

2. Activity Report: activity report, economic environment, prospects,

3. Financial Statements: income statement, balance sheet and their explanatory notes,

4. Statutory Auditor's Report: general and special reports,

5. Resolutions: presentation of resolutions submitted to the AGM.

6. Governance

• Message from the Chairman of the MFI's Board of Directors. • Composition of the Board of Directors and the Audit Committee (identity, role, functional organizational chart). • Frequency of meetings, convening of Directors, levels of decision-making. • Decisions submitted to a vote and adopted during the fiscal year. • Key figures, notable events, and Performance Indicators (Total Balance Sheet, Operating Income (RBE), Net Income (RN), Customer Resources, Customer Credit).

2. Activity Report

• Activity report for the general meeting • Economic environment (main sectors, public finances)

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• Prospects - Activities (products, finances...) - Risk management - Contracts

• Analysis of activity evolution - Evolution of Credit - Deposit Collection - Evolution of Cash Flow - Evolution of Results

3. Financial Statements (according to Instruction No. 2021-06)

• Balance Sheet and Off-Balance Sheet, • Income Statement, • Net Worth Statement, • Statement of Comprehensive Income, • Supplementary Statements, • Accounting Principles, Rules, and Methods (according to the Accounting Framework).

4. Statutory Auditor's Report (according to Instruction No. 2021-06)

• General Report (opinion on annual accounts, justification of assessments, verifications, and specific information) • Special Report (report on regulated agreements).

5. Resolutions

Presentation of resolutions submitted to the general meeting

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