Regulatory Alerts2018-01-01
General Authority for Financial Supervision Board of Directors Decision No. (121) of 2018 Regarding the Conditions, Rules and Procedures for Licensing Companies Engaged in Microfinance Activities
The General Authority for Financial Supervision issued Board Decision No. (121) of 2018, amended by Decision No. (92) in April 2023, to establish the conditions, rules, and procedures for licensing microfinance companies. The regulation mandates preliminary approval for company establishment, outlines specific capital adequacy and liquidity requirements, and details the licensing fees, supervisory cost coverage, and ownership controls for entities holding 50% or more of capital. Furthermore, it grants the Authority discretion to extend compliance periods for up to two years based on justified applications from licensees.
1 General Authority for Financial Supervision Board of Directors Decision No. (121) of 2018 dated July 30, 2018 Regarding the Conditions, Rules and Procedures for Licensing Companies Engaged in Microfinance Activities 1 In accordance with the latest amendment dated April 12, 2023 General Authority for Financial Supervision Board of Directors
- The Decision was amended by Board of Directors Decision No. (92) dated April 12, 2023 1
2 (Article One) Obtaining the Authority's preliminary approval for the establishment of the company (Article Two) Licensing Conditions
- Clause (4) of Article Six was added by General Authority Board of Directors Decision No. (92) dated 2023/4/12. Since the effective date of said decision, microfinance companies may exercise their activities with sufficient capital adequacy and financial liquidity for a period exceeding one year from the effective date, and the General Authority Board of Directors may extend this period for a maximum of two years upon reviewing justified applications submitted by the licensed companies.
3 (Article Three) Licensing Procedures
4 (Article Four) License Verification
(Article Five) Licensing Rules
(Article Six) Licensing Fees
(Article Seven) Supervision and Monitoring Cost Coverage
5 (Article Eight) Controls for Ownership of 50% or More of the Company's Capital
(Article Nine) (Article Ten)