CENTRAL BANK OF MADAGASCAR

DIRECTORATE OF MONETARY OPERATIONS

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INSTRUCTION NO. 002-DOM/20

regarding the establishment of an exceptional refinancing instrument to support the activities of Micro, Small, and Medium Enterprises (MPMEs)

The Governor of the Central Bank of Madagascar,

Having regard to Law No. 95-030 of February 22, 1996, relating to the activity and supervision of credit institutions, as amended,

Having regard to Law No. 2016-004 of July 29, 2016, supplemented by Law No. 2016-057 of February 2, 2017, establishing the Statutes of the Central Bank of Madagascar,

Having regard to Decree No. 2019-2069 of November 6, 2019, repealing the provisions of Decree No. 2014-1684 of October 29, 2014, appointing the Governor of the Central Bank of Madagascar and appointing the Governor of the Central Bank of Madagascar,

Having regard to Instruction No. 006-DOM/19 of October 25, 2019, relating to money market instruments,

DECIDES

Article 1: CONTEXT

In light of the consequences suffered by Micro, Small, and Medium Enterprises (MPMEs) due to the prevailing global health situation, the Central Bank of Madagascar (BFM) is establishing a line of credit in favor of banks as governed by Law No. 95-030 of February 22, 1996, relating to the activity and supervision of credit institutions, or the "Banking Law."

Article 2: OBJECTIVE

Within the specific framework stipulated in Article 1 of this Instruction, the market instrument provided for in Article 9 of Instruction No. 006-DOM/19 of October 25, 2019, relating to money market instruments, is subject to specific implementation.

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Article 3: SCOPE OF APPLICATION

The application of the provisions of this Instruction is exclusively linked to the support of the activities of micro-enterprises, on the one hand, and Small and Medium Enterprises (SMEs), on the other hand, by banks.

For the purposes of this Instruction:

• "Micro-enterprises" are enterprises having fewer than five (5) employees and/or presenting an annual balance sheet of less than sixty million Ariary (60,000,000 Ariary),
• "SMEs" are enterprises having a permanent workforce between five (5) and one hundred (100) employees and presenting an annual balance sheet between sixty million Ariary (60,000,000 Ariary) and six hundred million Ariary (600,000,000 Ariary).

Article 4: IMPLEMENTATION MODALITIES

This article prescribes the specific implementation modalities for the instrument provided for in Article 9 of Instruction No. 006-DOM/19 of October 25, 2019, relating to money market instruments.

4.1 BFM may launch liquidity injection operations at a fixed rate with total or partial allocation of bids, with maturities that may extend up to three (3) years. The adjudication of offers submitted by banks remains at the discretion of BFM based on the evolution of monetary aggregates and monetary stability.

4.2 These operations are launched at most once per month, on the first Friday of the month.

4.3 The rate for these exceptional liquidity injection operations is set at 5.47%.

4.4 Banks must indicate in their submission, in accordance with the model in Annex I, the amount of their offer relative to the rate fixed by BFM.

4.5 Eligible collateral for this exceptional refinancing are Treasury Bills (BTA) and Treasury Bonds (BTF), respecting the principle of covering liquidity injection operations on the money market. At the time of launching repurchase operations, this type of refinancing will conform to the processing modalities of any liquidity injection operation by BFM.

Article 5: OBLIGATIONS AND SANCTIONS

Under penalty of forfeiture of the term in case of non-compliance with the obligations arising from this Instruction, banks are required to:

• exclusively allocate the funds obtained under this Instruction to the support of micro-enterprises and SMEs.
• declare to BFM, with a copy to the General Secretariat of the Banking and Financial Supervision Commission, all information relating to credits granted to micro-enterprises and/or SMEs in accordance with the model in Annex II.

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Article 6: RESTRICTIONS

Banks that have already benefited from liquidity via the instrument governed by this Instruction cannot submit to other operations on the same instrument until the funds previously obtained have been exhausted.

Article 7: FINAL PROVISIONS

Without prejudice to the specific provisions stated above, the procedures applicable to exceptional refinancing operations governed by this Instruction are identical to those for fixed-rate operations with total or partial allocation of bids stipulated in Article 9 of Instruction No. 006-DOM/19 of October 25, 2019, relating to money market instruments.

Article 8: ANNEXES

The annexes form an integral part of this Instruction.

Article 9: ENTRY INTO FORCE

This Instruction enters into force as of the date of its signature.

Antananarivo, 10 APR 2020

THE GOVERNOR Henri Edmond RABARIJOHN

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ANNEX I

SUBMISSION FOR EXCEPTIONAL LIQUIDITY INJECTION OPERATIONS TO SUPPORT THE ACTIVITIES OF MICRO-ENTERPRISES AND SMEs

Name of the bank:
Rate:
Launch of _______________

SUBMISSION
Total Amount (in Ar)
In figures

COLLATERAL:

Total amount of collateral(1) (2): Ariary...................
Interest amount: Ariary ...................

ORDER NO.	COLLATERAL
	Nature	Reference	Acquisition Rate	Maturity	Number of securities	Nominal amount of the security (In Ariary)
						In words
TOTAL...

(1) Amount requested plus interest
(2) Multiple of 100 million Ariary.

At _______________, on _______________
(Authorized signatures and bank stamp)

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ANNEX II

NAME OF THE ESTABLISHMENT

Date: _______________

List of clients who benefited from credit, subject to exceptional refinancing by BFM, during the month of ...............

Rank	Beneficiary Name	Nature of Credit	Amount of Credit Disbursed	Amount of Installment	Date of 1st Repayment	Duration of Credit	Maturity Date	Other Information
1								- Credit Rate<br>- Activity Sector<br>- Etc.
...
n

TOTAL

Authorized Signature and Stamp