Regulatory Alerts2019-01-01
Capital Adequacy Requirements for Deposit Taking Microfinance Institutions (Amendment) Directive, 2019
The Registrar of Financial Institutions issued this 2019 amendment to establish updated capital adequacy rules for deposit-taking microfinance institutions, defining subordinated debt and limiting supplementary tier 2 capital to one hundred percent of core tier 1 capital. The directive mandates that eligible subordinated debt must be unsecured, have a minimum five-year maturity, remain subordinate to depositor claims, and require institutional solvency for principal or interest payments. Registered microfinance entities must connect to the designated transaction processing hub, face monetary penalties of up to ten million Kwacha for non-compliance, and achieve full adherence within twelve months of the directive's commencement.
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