BCRG Instruction No. I/DGSIF/DSIMF/002/2018 on the Operations of Microfinance Institutions

Page 1 of 3 JUNE 29, 2018 Conakry, on ...........................................

REPUBLIC OF GUINEE CENTRAL BANK

BCRG INSTRUCTION NO. I/DGSIF/DSIMF / 002 /2018 ON THE OPERATIONS OF MICROFINANCE INSTITUTIONS

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The Governor

Having regard to Ordinance No. D/2009/046/CNDD of February 7, 2009, establishing the Statutes of the Central Bank of the Republic of Guinea;

Having regard to Decree No. D/2010/010/PRG/SGG of December 27, 2010, appointing the Governor of the Central Bank of the Republic of Guinea;

Having regard to Law No. L/2017/031/AN of July 4, 2017 on inclusive financial institutions in the Republic of Guinea, particularly Article 5.

HEREBY DECIDES

Article 1 This instruction applies to Microfinance Institutions (hereinafter, "MFIs").

SECTION 1: GENERAL PROVISIONS

Article 2: For the purposes of this instruction, an overdraft or cash facility means that an MFI allows a transaction to be carried out by a member or client despite insufficient funds in the latter's account, without such granted credit being governed by a formal contract between the institution and the member or client at the time of granting.

Article 3: An MFI may not grant either an overdraft or a cash facility.

Article 4: An MFI may not grant credit based on a security taken over its shares or, as applicable, its stock, nor over those of another MFI or a parent structure belonging to the same network.

However, a basic savings and credit cooperative may pledge the equity shares held by its members as security for the credit it grants them.

Article 5: When granting credit, every MFI shall agree in writing with its debtor on the terms of such credit, including notably the debtor's obligation to repay the granted credit as well as to pay the related interest.

When granting credit, every MFI shall include in the contract

• the nominal interest rate, as well as all other fees related to the establishment of such credit,
• the annual effective global rate (AEG/TAEG),
• the total cost of credit.

Article 6: Every MFI shall take all appropriate measures to ensure that a debtor complies with each of the obligations referred to in the preceding article.

SECTION 2: PAYMENT SERVICES OFFERED BY MFIS

Article 7: MFIs may offer their clients payment services under the conditions set out in this section.

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Article 8: MFIs not authorized to collect savings may not offer their clients any payment services, in any form whatsoever (card payments, fast money transfers, etc.), except for payment services provided as an AGENT or SUB-AGENT on behalf of a credit institution or another authorized and licensed IOFI (Other Financial Institution) permitted to offer such services.

Article 9: MFIs authorized to collect savings may offer payment services within the following limits:

• Only fast money transfers, account-to-account transfers, card payments, and electronic money services are authorized,
• Subject to the prior implementation of an automated real-time transaction settlement system, and provided that the payment service is internal to the MFI or allows,
• Subject to the compliance of the payment system with the requirements for transaction monitoring for anti-money laundering (AML) and counter-terrorist financing (CFT) purposes.

SECTION 3: FINAL PROVISIONS

Article 10: This instruction repeals any prior instructions or provisions relating to the same subject matter.

Article 11: This instruction enters into force on the date of its signature.

[Signature/Seal]

Dr. Louncény Nabé

P.O. Box No. 692 - Conakry - Telephone: (+224) 664 67 77 77 Fax: +224 669 08 88 88 - E-mail: secretariat.gouv@bcrg-guinee.org www.bcrg-guinee.org / 6 Commerce Boulevard C/Kaloum