Notice No. 5/GBM/2023, of October 16 - Establishes the Rules for Disclosure and Provision of Pre-Contractual Credit Information

SUMÁRIO A V I S O The matter to be published in the «Boletim da República» must be sent as a duly authenticated copy, one for each subject matter, containing, in addition to the necessary indications for this purpose, the following endorsement, signed and authenticated: For publication in the «Boletim da República». IMPRENSA NACIONAL DE MOÇAMBIQUE, E. P. Banco de Moçambique: Aviso n.º 5/GBM/2023: Establishes the rules to be observed in the disclosure and provision of pre-contractual information on credit. Aviso n.º 6/GBM/2023: Approves the Regulation on Prudential Ratios and Limits of Mutual Guarantee Companies. Segunda-feira, 16 de Outubro de 2023 I SÉRIE — Número 197 BANCO DE MOÇAMBIQUE Aviso n.º 5/GBM/2023 de 16 de Outubro In order to promote transparency regarding the provision of pre-contractual information by credit institutions, financial companies, and microfinance operators granting credit, the Bank of Mozambique, exercising the competence conferred upon it by paragraph 6 of Article 64 of Law No. 20/2020, of December 31 – the Credit Institutions and Financial Companies Law, determines:

CAPÍTULO I Disposições gerais ARTIGO 1 Objecto This Notice establishes the rules to be observed in the disclosure and provision of pre-contractual information on credit.

ARTIGO 2 Âmbito

1. This Notice applies to credit institutions and financial companies authorized to grant credit.
2. This Notice further applies, in specially established situations, to microfinance operators subject to the supervision of the Bank of Mozambique.

ARTIGO 3 Definições For the purposes of this Notice, the following terms are understood as: a) consumer - an individual or legal entity that uses or intends to use any financial product and service, made available or marketed by credit institutions, financial companies, and other entities subject to supervision or monitoring by the Bank of Mozambique; b) distance contract - any contract whose formation and conclusion are carried out exclusively through distance communication means, integrated into a sales or service provision system organized by the provider for this purpose; c) housing credit - credit granted for the purpose of acquiring, constructing, or rehabilitating property for residential use, or for acquiring or maintaining rights over existing or planned real estate; d) consumer credit - credit intended to satisfy needs for acquiring goods or services for consumption; e) revolving credit - credit of indefinite duration with a defined maximum limit, which the customer may use over time up to this limit, and in which, upon amortization of outstanding amounts, the customer may reuse it, with the exception of overdraft facilities; f) overdraft facility - a contract by which a credit institution allows the holder of a bank account to draw funds exceeding the account balance; g) benchmark - corresponds to the interest rate representing market conditions, used as a reference in loans with variable rates; h) distance communication means - any durable and demonstrably provable communication medium that can be used without the physical and simultaneous presence of the institution and the customer, including web pages; i) total credit amount - corresponds to the overall or maximum limit of the credit; j) total credit amount charged to the customer - corresponds to the overall credit plus its total cost to the customer, which is the sum of the interest value and the value of charges included in the calculation of the Effective Total Cost of Credit Rate (TAEG); k) complete price list - a set of information regarding all commissions and charges, made available to the public by credit institutions and financial companies; l) installment - the amount to be paid by the customer at specified intervals to fulfill financial obligations assumed in the credit contract; m) Credit Restructuring - changes to the respective contractual conditions, which have resulted, notably in extending the repayment term, introducing grace periods, or capitalizing interest, due to the borrower's financial difficulties, regardless of whether there was a delay in paying principal or interest installments; n) net income - the value corresponding to total gains received regularly and verifiable at the time of assessing the consumer's solvency, after deducting all taxes and other legal deductions. It includes, but is not limited to, income from salary, remuneration for services or social benefits, revenues from other economic activities, real estate rents, or investment income, among other client income sources; o) effective annual rate (EAR) - a rate that measures all costs associated with a specific loan, including interest and other related charges, excluding taxes; p) effective total cost of credit rate (TAEG) - the actual total cost of credit, including interest, commissions, taxes, fees, insurance, and other charges directly linked to the use of credit; q) nominal annual rate (NAR) - an interest rate expressed as a fixed or variable percentage applied annually to the credit amount; r) fixed nominal rate - an interest rate expressed as a fixed percentage, agreed between the credit institution, financial company or microfinance operator and the customer during the contract term, or different fixed interest rates agreed for respective partial periods, if not all determined in the credit contract, considering that each fixed interest rate applies only to the partial period for which it was defined.

CAPÍTULO II Divulgação e disponibilização de Informação de Crédito ARTIGO 4 Divulgação e disponibilização de informação geral de crédito

1. Without prejudice to Article 64 of Law No. 20/2020, of December 31, and other applicable legislation, credit institutions and financial companies must observe and disclose pre-contractual credit information duties.
2. Credit institutions and financial companies must make available through their branches, agents, or distance communication means, clear, true, complete, understandable, and legible information on credit contracts.
3. The information referred to in the preceding paragraph must be made available on paper or another durable and demonstrably provable medium.
4. The general information referred to in paragraph 2 must be made available or provided in a format similar to the Standardized Credit Information Sheet model, and include at least: a) identification of the institution responsible for marketing the credit, indicating its name, address, and contacts, as well as the banking agent, if applicable; b) date of preparation of the information sheet; c) main characteristics of the product, such as: (i). indication of the type of credit to which it belongs; (ii). minimum and maximum credit limits; (iii). terms of use; (iv). maximum contract duration; (v). repayment terms; (vi). associated guarantees; (vii). type of applicable NAR, indicating whether it is fixed, variable, or a combination thereof, accompanied by a brief description of the characteristics of the fixed and variable rates, including identification of applicable benchmarks, administrator, and potential consequences for the consumer; (viii). applicable commissions and other charges; (ix). early repayment modalities and respective penalties, if any; (x). frequency and channels for sending account statements; (xi). admissible causes for suspension of payment installments by the customer; (xii). identification of the financed good or service, in case of a linked contract; d) indication of all informational elements allowing the customer to evaluate the costs they will bear; e) other aspects, such as the validity period and description of other customer rights, notably the right to obtain a copy of the contract, financial plan, restructuring and respective financial plan, outstanding balance, clearance letter, and the right of withdrawal within seven working days.

ARTIGO 5 Dever pré-contratual de divulgação de informação de crédito personalizada

1. Credit institutions and financial companies must disclose and provide personalized credit information through the Standardized Credit Information Sheet, attached to this Notice, which is an integral part thereof.
2. The Standardized Credit Information Sheet must be completed based on the information presented by the customer.
3. For the purpose of fulfilling the pre-contractual information duty, credit institutions and financial companies must: i. Provide information to customers through the Standardized Credit Information Sheet (FINC) attached to this Notice, which is an integral part thereof; ii. keep a copy of the standardized sheet, which must be signed by the customer and filed in the respective process; iii. inform the customer about available channels for providing information and/or additional clarifications.
4. For the purposes of paragraphs (a) and (b) of the preceding paragraph, the Personalized Standardized Information Sheet must be delivered at the time of credit product simulation or simultaneously with the communication of credit approval, in which case it must incorporate the terms of the credit contract.
5. The information referred to in the preceding paragraphs must be provided on paper or another durable and demonstrably provable medium, or through distance communication means if requested in writing by the customer.
6. In contracting credit products, credit institutions, financial companies, and microfinance operators must ensure that the customer: a) Provides true information regarding their economic situation for correct risk assessment and payment capacity, requiring valid proof of declared income; b) Is aware of the agreed installment and the percentage it represents in their monthly net income; c) Receives a copy of the credit contract and respective financial plan, containing, separately, principal and interest installments; d) Is aware that the provided funds must be applied for the purpose agreed in the contract.
7. Credit institutions and financial companies remain bound by the contractual proposal made to the customer for a minimum period of thirty days, with the exception of interest rates and other costs which may be altered according to market conditions, allowing the customer to compare proposals, evaluate implications, and make an informed decision.
8. Credit institutions and financial companies must respect the standardized information sheet model referred to in paragraph (a) of paragraph 3 of this article, and may not add or remove any field, even if some fields are not applicable to the contract in question, in which case they must insert the expression "not applicable or N/A."
9. In cases of contradiction between the general standardized information sheet and the personalized standardized information sheet, the content most favorable to the consumer shall prevail.

CAPÍTULO III Disposições transitórias e finais ARTIGO 6 Período de adequação Credit institutions, financial companies, and microfinance operators must adapt to this Notice within sixty days from the date of its entry into force.

ARTIGO 7 Regime sancionatório Violation of this Notice constitutes an offense punishable under Law No. 20/2020, of December 31, the Credit Institutions and Financial Companies Law.

ARTIGO 8 Entrada em vigor This Notice enters into force on the date of its publication.

ARTIGO 9 Esclarecimento de dúvidas Doubts regarding the interpretation and application of this Notice must be submitted to the Conduct Supervision Department of the Bank of Mozambique.

Maputo, August 30, 2023. — The Governor, Rogério Lucas Zandamela.

Anexo Ficha de Informação Normalizada de Crédito (FINC) Condições Financeiras do Crédito A. Elementos de Identificação

1. Identification of the credit institution/financial company (lending institution) 1.1 Name [Insert institution name]. 1.2 Address [Insert institution address]. 1.3 Contacts [Insert phone number, email address, among others]. 1.4 Other data (Tax ID/NUIT, among others).
2. Date of the Standardized Credit Information Sheet (FINC) [DD/MM/YY] [State the date of preparation of the FINC]
3. Identification of the credit participant(s) [Insert name(s) of the principal debtor(s) and guarantors or sureties, if applicable].
4. State the type of FINC 4.1 Simulation / Interview 4.2 Validity B. Descrição das Principais Características do Crédito
5. Commercial designation of the credit 1.1 Modality [State the credit modality] 1.2 Purpose [State the objective of the credit] 1.3 Type of credit [State whether it is a Loan Account, Secured Current Account, Overdraft on Account, Project Finance, Financial Leasing, Factoring, Issued Bank Guarantee, Letter of Credit, etc.]
6. Promotional campaign (If applicable) 2.1 Campaign identification [State the campaign name] 2.2 Campaign conditions [State the access conditions and validity period]
7. Access Conditions [State whether opening a DO (Operating) account is required, provision in tranches or not, need to transfer the amount to third parties with approval, being a public employee or of a specific institution, etc.]
8. Credit amount and currency [State the total credit value and currency]
9. Contract duration [State the credit duration] 5.1 Repayment modality [state payment modalities: normal, with principal grace period, with capital and interest grace period, others.] 5.2 Installment regime [Constant installments, progressive, etc.] 5.3 Installment frequency [Monthly, semi-annual, annual, etc.] 5.4 Installment amount [The installment value, which must be the same as that in effect in the financial plan, in the case of fixed-rate credits.] 5.5 Number of installments [State the number of installments, which must be the same as that in the financial plan]
10. Linked contract, if applicable [Complete only if the loan serves to finance, solely, a purchase contract for goods or services and the purchase and financing contracts are interlinked] 6.1 Good or service 6.2 Price
11. Guarantees [State the credit counterparty/guarantee: surety, bond, pledge, mortgage, etc.] 7.1 Movable Guarantees Registration Center (CRGM), if applicable [State whether the guarantee is or is not registered in the CRGM]
12. Required ancillary contracts, if applicable 8.1 Required insurance [The customer has the right to opt for insurance with their preferred insurance entity, provided that the policy covers the minimum coverages and requirements indicated in the points below. Clearly state the insurance activation conditions, the responsibilities of the parties (Credit Institution, Financial Company, and Consumer), in case of event occurrence. The presented information is merely indicative, corresponding to the conditions usually practiced by the insurer in similar situations.] 8.1.1 Insurance entity identification [Insert] 8.1.2 Commercial designation of the product [Insert] 8.1.3 Description [Insert] 8.1.4 Required minimum coverages [Insert] 8.1.5 Required duration [Insert] 8.1.6 Other required minimum requirements [Insert] 8.1.7 Frequency and payment value of the premium [Insert] 8.2 Other required contracts
13. Early repayment 9.1 Partial or total early repayment commission [State the applicable commission for each modality] 9.2 Exemptions in commission collection [State the conditions provided by legislation or established by the institution itself] 9.3 Conditions for exercising the right to partial or total repayment [Describe the conditions established in legislation or by the institution itself] C. Custos do Crédito
14. Nominal Annual Interest Rate (TAN) 1.1 Nominal interest rate [State x.xx%, if fixed rate / if variable rate state benchmark x.xx%+spread x.xx%] 1.1.1 Interest rate regime [State whether the rate is fixed or variable, specifying the periods to which each modality applies] 1.1.2 Fixed nominal interest rate [x.xx%, state the fixed rate, calculation formula, on the date of contract signing, if applicable] 1.1.3 Change in nominal interest rate [State under what circumstances the NAR may vary, including the communication procedure to the customer]
15. Effective Total Cost of Credit Rate (TAEG) [Total loan cost as a percentage and annual] 2.1 Effective Total Cost of Credit Rate (TAEG) [State TAEG x.xx% according to the specifics of the requested credit and the following points] 2.2 Total value of charges [State the total value of charges included in TAEG, excluding cost reduction in case of optional associated sales] 2.3 Optional associated sales [Acquisition of financial products or services upon contracting the credit] 2.3.1 Description of the acquired financial product or service [Quantify the financial effects on the loan regarding NAR, spread, reduction or exemption of commissions or other charges and state their respective conditions for application, maintenance, or revision] 2.4 Promotional conditions [In accordance with point B.2] 2.4.1 Description of promotional conditions [State the characteristics of the loan under exceptional conditions] 2.4.2 TAEG with promotional conditions [x.xx%] 2.4.3 TAEG without promotional conditions [x.xx%] 2.5 Commissions included in TAEG 2.5.1 Initial commissions [State the opening commission, in case of benefiting from reductions as per points 2.3 and 2.4, mention] 2.6 Annual fees, if applicable [x.xx%] 2.7 Stamp duty, if applicable [State the tax value by incidence (principal, interest, or commissions)] 2.8 Costs with operating account (DO) [State any annual account maintenance commissions] 2.9 Costs with payment instruments [Specifically state charges for payment instruments, excluding the annual fees mentioned above, e.g., costs with checks, transfers, etc.] 2.10 Other costs 2.11 Conditions for cost changes, if applicable
16. Total amount charged to the consumer, if applicable [State the total credit amount plus the total value of costs, i.e., the total interest and charges in the TAEG calculation.]
17. Notarial costs, if applicable [State the value, or estimate of notarial costs and who will pay them]
18. Penalties and consequences for non-payment 5.1 Default interest rate [State all consequences of non-payment, e.g., default interest rates, worsening of credit classification in the Credit Registration Center of the Bank of Mozambique, sale or loss of financed goods, enforcement of guarantees, etc.] 5.2 Rules for applying default interest rate State the calculation formula 5.3 Implications of contract non-compliance (failure to pay credit) Notas Explicativas
19. The Standardized Credit Information Sheet (FINC) must be completed with clear, true, complete, and updated information in Portuguese, using characters with a font equivalent to the minimum size of 12 Times New Roman, allowing easy reading by a reader with average visual capacity.
20. The information presented in tables between square brackets must be completed or detailed, as appropriate, by credit institutions. In turn, the information presented in italics must be included in the standardized information sheet made available or delivered to the customer.
21. Credit institutions must deliver the FINC to their customers prior to signing the loan contract.
22. In field 2 "Promotional campaign" of chapter B, it should only be completed if the loan in question falls within a promotional campaign. If not, institutions must mark "Not applicable".
23. The fields of point 8.1 "Required insurance" chapter B must be completed according to the conditions required by the insurer.
24. Point 1.1.2 "Fixed nominal interest rate" of chapter C should only be completed if the interest rate applicable to the loan is fixed.
25. Information regarding the other elements for determining the interest rate must be included in point 2.10 "other costs".
26. In this case, the information provided in points 1.1 "Nominal interest rate" to 1.1.3 "Change in nominal interest rate" of field 1 "Nominal Annual Interest Rate" of Chapter C must be completed in the usual terms, according to the characteristics of the simulated or approved loan.
27. Field 2.3 "Optional associated sales" of chapter C should only be completed if there are other financial products and services acquired by the customer.