REPUBLIC OF GUINEA

CENTRAL BANK

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Conakry, June 29, 2018

BCRG INSTRUCTION NO. I/DGSIF/DSIMF/012/2018

ON NON-EMPLOYEE INTERMEDIARY AGENTS ACTING ON BEHALF OF INCLUSIVE FINANCIAL INSTITUTIONS

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The Governor

In view of Ordinance No. D/2009/046/CNDD dated February 7, 2009, establishing the statute of the Central Bank of the Republic of Guinea; In view of Decree No. D/2010/010/PRG/SGG dated December 27, 2010, appointing the Governor of the Central Bank of the Republic of Guinea; In view of Law No. L/2017/031/AN dated July 4, 2017, on inclusive financial institutions in the Republic of Guinea, particularly Articles 79 and 83.

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HEREBY DECIDES

Article 1: Scope of Application

This instruction applies to non-employee agents of Microfinance Institutions (hereinafter, “MFIs”), Electronic Money Establishments (hereinafter, “EMEs”) and Postal Financial Services (hereinafter, “PFS”), as well as to their principals.

This instruction aims to set the conditions for the exercise of activities by non-employee intermediary agents acting on behalf of Inclusive Financial Institutions (hereinafter, the “AGENTS”) in the Republic of Guinea.

Article 2: Definitions

The following are considered AGENTS,

• Microfinance Operation Intermediaries,
• Electronic Payment Services Intermediaries,

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• Intermediaries acting for Postal Financial Services. Natural or legal persons other than IFIs who, as a regular activity (main or ancillary), bring parties together for the conclusion of a banking transaction, without acting in their own name, are also considered AGENTS.

SECTION 1: USE OF AGENTS BY IFIS

Article 3: Prior Authorization of the Arrangement

IFIs may be authorized to distribute all or part of their financial services to customers through one or more AGENTS. These AGENTS operate within the limits of their approval, in accordance with the conditions set forth by this Instruction.

Any IFI wishing to use AGENTS must submit a project file to the BCRG for prior authorization, explaining in particular:

• The objectives, strategy and architecture of the proposed arrangement;
• The technical means used, particularly in case of payment systems or cash handling, and the impact on operational risk management;
• The operations authorized for AGENTS;
• The standard contract(s) linking the IFI with the AGENT(s).

The list of required documents is communicated by BCRG Instruction.

For EMEs, the file must be submitted at the time of approval if it is part of their business model.

Article 4: Technical Requirements or Specifications

In case of cash or payment operations, the IFI must ensure that the transaction settlement system operates in real time.

The transaction settlement system must meet specifications or requirements aimed at:

• ensuring high platform availability;
• preserving message integrity;

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• maintaining information confidentiality;
• guaranteeing transaction authenticity;
• ensuring non-repudiation of transactions.

The IFI must in particular:

• implement a proven operational continuity mechanism;
• implement a risk management strategy defining the policy, practices and procedures associated with risks inherent to the system.

Article 5: Information Reporting to BCRG

IFIs that have appointed AGENTS must, within three (03) months following the end of the calendar year, submit to the Central Bank a consolidated report covering their AGENTS' activities. This report will allow assessment of the nature and amount of operations performed.

The following are attached to this report:

• The updated list of AGENTS;
• The list of AGENTS who have ceased operations for the IFI, and the reasons for the termination of contractual relations.

The IFI must notify monthly:

• The consolidated and updated list of its AGENTS;
• Another list showing changes in its AGENT network (network entries and exits).

The lists are transmitted in an Excel format as determined by BCRG Instruction.

SECTION 2: AGENT REGIME

Article 6: Delegation

An AGENT is not authorized to delegate the performance of banking activities. This provision does not prevent an AGENT, if a legal person, from using its employees within the framework of its intermediary activity and under its responsibility.

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However, for the distribution of electronic money, the distribution network may be organized around principal distributors and sub-distributors.

Principal distributors may in particular be IFIs, insurance companies, non-financial private enterprises or any other natural or legal person registered in the Trade and Movable Credit Register, possessing sufficient liquidity to meet the needs of electronic money unit holders.

Sub-distributors are natural or legal persons who have received a mandate from one or more principal distributors, within the framework of a tripartite contract between the Issuer, the principal distributor and the sub-distributor.

Principal distributors are responsible for supplying sub-distributors with electronic money and liquidity, to carry out one or more operations referred to in paragraph 1 of this article.

Article 7: Authorized Operations

In accordance with the contract binding it to the IFI, the AGENT may be authorized to perform on behalf of the IFI the following operations:

• Carry out account opening formalities for deposit or electronic money accounts for natural persons;
• Ensure customer identification;
• Perform deposits and/or withdrawals for customers;
• Process fund transfers for customers;
• Offer various payment services;
• Issue account or transaction statements for the benefit of the customer;
• Process credit applications on behalf of Microfinance Institutions.

Article 8: Exercise of the Mandate

Intermediation activity may only be exercised between two parties, at least one of which is an IFI. The AGENT acts pursuant to a mandate issued by this IFI. This mandate specifies the nature and conditions of the operations the intermediary is authorized to perform.

The AGENT acts pursuant to a mandate contract signed with an IFI, for the provision on behalf of the IFI of all financial services within their approval limits and in accordance with the rules set by this Instruction.

It specifies whether the AGENT is mandated to hold funds or not.

The AGENT may conclude new mandates with other IFIs. Any exclusivity clause in the AGENT's mandate contract with an IFI is prohibited.

Article 9: Pricing

IFIs must keep up-to-date and make publicly available all information related to offered products and services, as well as the fee structure, through any publication channel they deem appropriate. This information, including details defined by BCRG circular letter, must be disseminated to all their AGENTS.

Under no circumstances may AGENTS impose terms and conditions or charge fees outside those stipulated by the IFI.

Article 10: Content of the Mandate Contract

The mandate contract establishes the roles and responsibilities of each party. It includes:

• The names of the parties;
• The contract duration;
• Specific conditions, including the ceiling or rule for determining ceilings and cash holdings of AGENTS, the nature of services and products authorized for the AGENT, security guarantees if applicable;
• General conditions (including penalties for non-compliance with clauses, termination conditions).

The IFI is financially liable to customers for any malfunction causing financial loss related to its agents' activities.

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These provisions do not prevent the IFI from subsequently seeking recourse against its agents within the framework of their contractual relations.

Article 11: AGENT Professional Card

Every AGENT holds a professional card issued by the mandating IFI(s):

• The AGENT has one professional card per mandate. They present the appropriate card to any client, upon request.
• The card bears the signature of its holder (the AGENT, a natural person, or the representative of the legal person AGENT).

The card, valid for a maximum of three (03) years and renewable, contains the following information:

• The photograph of the natural person holding AGENT status;
• The surname, first name and professional address of the cardholder (the AGENT, a natural person, or the representative of the legal person AGENT);
• The name of the legal entity on whose behalf the microfinance operation intermediary acts;
• The card validity period;
• The ID number of the cardholder (natural person) or registration number of the legal entity.

Professional cards are returned to the IFI upon termination of the mandate.

Article 12: Surveillance and Network Management of AGENTS

IFIs must, in their contracts with their AGENTS, have clear and well-documented policies and procedures for the latter.

They evaluate AGENTS and take corrective measures to ensure good management of the activity, taking into account all relevant factors, without time limits in particular:

• Assign a unique identification number to each AGENT and keep it updated [implementation of a unique AGENT number via the CREDIT OFFICE housed at BCRG, with low-level (via name, surname, date of birth, etc.) and HIGH-level (via facial biometrics then 10-finger fingerprint) identity verification systems],
• Ensure AGENTS receive appropriate training;
• Implement supervision mechanisms for AGENTS to ensure they exercise their activities in accordance with BCRG rules.

They must further ensure that:

• The AGENT has an account at an approved establishment;
• The AGENT has a real and well-established economic activity;
• The AGENT possesses appropriate physical infrastructure and human resources to provide the service with the necessary degree of efficiency and security;
• The AGENT, as a natural person, has good morality and the necessary honorability to exercise the activity;
• The AGENT has sufficient liquidity to cover routine customer deposits and withdrawals, where applicable;
• The AGENT never performs transactions exceeding their authorization level at the IFI for which they are the agent.

Article 13: Termination of Functions

In addition to provisions regarding AGENT contract termination that may be included in the contract itself, an AGENT contract ends in the following cases:

• When the AGENT directly performs operations with customers without the IFI's knowledge and/or in violation of agreements and conditions previously concluded and defined by the IFI;
• When the AGENT has been convicted of any economic crime or offense by a competent court;
• When the AGENT is unable to continue its activity under satisfactory conditions;
• The AGENT entity, a legal person, is dissolved or liquidated;
• In case of transfer, relocation or closure of the AGENT's premises without prior written agreement from the IFI;
• When the AGENT breaches a provision of this Instruction which, in the opinion of the IFI, leads to termination of the AGENT relationship.

SECTION 3: MISCELLANEOUS AND FINAL PROVISIONS

Article 14: BCRG Controls

The BCRG may, if it deems appropriate, conduct on-site inspections at IFIs or AGENTS to verify the information provided.

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Article 15: Designation/Naming

In the exercise of their activity, AGENTS are prohibited from using designations such as “BRANCH”, “BANK”, “IFI”, “MFI”, “Microfinance Institution”, “EME”, “Electronic Money Establishment”, “PFS”, “Postal Financial Services” or any other term that might lead to the belief that the AGENT itself is an approved financial institution.

Article 16: AGENTS Register

The Central Bank maintains a register of AGENTS, regularly updated and published on the BCRG website.

Article 17: Submission of Lists to BCRG

Every IFI must send, by the 7th of each month at the latest, lists of its AGENTS finalized at the end of the previous month, according to the format specified in the Annex.

Article 18: Payment of a Single Fee for Obtaining the Professional Card

To exercise their activity, AGENTS pay a single registration fee at an amount fixed by the BCRG.

The registration fee is collected by the PRINCIPAL, upon initial issuance of the professional card.

Article 19: Entry into Force

This instruction, including its annex which forms an integral part thereof, enters into force on the date of its signature.

Dr Louncény Nabé

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Annex: Format for Retailer Notification Lists

Information regarding each retailer is contained on a single line.

EXCEL SPREADSHEET 1: CONSOLIDATED LIST OF AGENTS, NATURAL PERSONS

The Excel communication spreadsheet for Agents, natural persons, contains the following thirteen columns:

• Unique professional registration number (NEUP)
• Surname
• First name
• Sex (M / F)
• Type of national identity document
• ID number
• Nationality
• Date of birth
• Commune and sub-prefectures of usual residence
• Main professional registration number (RCCM or other)
• Principal/agent contract number
• Contract end date (if fixed-term)
• Approval number of the mandating financial institution

EXCEL SPREADSHEET 2: CONSOLIDATED LIST OF AGENTS, LEGAL PERSONS

The Excel communication spreadsheet for Agents constituted as legal persons contains the following 9 columns:

• Unique professional registration number (NEUP)
• Name of the legal person
• Type of legal person (SA, SARL, association, cooperative company, etc.)
• Professional registration number in the competent register
• Type of register
• List of communes and sub-prefectures where the legal person has a stable presence

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• Principal/agent contract number
• Contract end date (if fixed-term)
• Sub-agent capability (YES / NO)
• Approval number of the mandating financial institution

EXCEL SPREADSHEET 3: VARIATIONS IN THE LIST OF AGENTS (TO BE PRODUCED)

The Excel communication spreadsheet for variations allows tracking of developments; it does not constitute a consolidated list of Agents. It contains the following 5 columns:

• Unique professional registration number (NEUP)
• Incoming (I) / outgoing (O) corrective of any identifier element (C)
• Date of occurrence of the event
• List of communes and sub-prefectures where the AGENT has a stable presence / main residence
• Approval number of the mandating financial institution.