Regulatory Alerts2011-10-16
Financial Services External Borrowing Requirements for Savings and Credit Cooperative Societies Directive, 2013
Issued by the Registrar of Financial Institutions under the Financial Services Act, 2010, this directive mandates external borrowing limits for Savings and Credit Cooperative Societies (SACCOs) to ensure financial prudence. SACCOs may only borrow externally up to five or ten percent of total assets based on their institutional capital ratio, with any excess requiring Registrar approval and a binding twelve-month compliance plan. Non-compliance triggers monetary penalties of up to five million Kwacha for the society and two million Kwacha for board members or management, alongside additional administrative enforcement actions.
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