Regulatory Alerts2022-01-01
Regarding External Controls
The Central Bank of Djibouti mandates that all microfinance institutions undergo an annual external audit by a licensed statutory auditor and submit the complete audit report to the Bank. The Central Bank exercises comprehensive supervisory authority over these institutions, including the power to conduct on-site and document-based inspections, demand financial recovery plans, issue injunctions, and place non-compliant entities under provisional administration. Inspectors are granted unrestricted access to all necessary documents and information, with professional secrecy explicitly waived to facilitate regulatory oversight.
CENTRAL BANK OF DJIBOUTI
INSTRUCTION NO. 2022-13/IMF
REGARDING EXTERNAL CONTROLS
The Governor of the Central Bank of Djibouti,
Having regard to Law No. 118/AN/11/6th L of January 22, 2011, amending the statutes of the Central Bank of Djibouti;
Having regard to Law No. 179/AN/07/5th L of May 16, 2007, regulating microfinance activities on the territory of the Republic of Djibouti;
Having regard to Law No. 117/AN/11/6th L of May 25, 2011, regulating financial cooperatives;
Having regard to the Commercial Code, Book 3 on Company Law;
Having regard to Law No. 119/AN/11/6th L of January 22, 2011, on the establishment and supervision of credit institutions and financial auxiliaries;
Having regard to Decree No. 2018-171/PRE of May 8, 2018, appointing the Governor of the Central Bank of Djibouti.
Orders:
Article 1: All Microfinance Institutions must be subject, each year, to an external audit by at least one licensed Statutory Auditor.
Article 2: The audit report on the annual financial statements by the statutory auditors must be submitted to the Central Bank.
It must include, in addition to the opinion, the verified financial statements and all notes and annexes, which form an integral part thereof.
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Article 3: The Central Bank is tasked with supervising microfinance institutions.
It is vested with the following responsibilities:
- Ensuring compliance with regulatory provisions, prudential standards, the professional code of ethics, as well as its own decisions;
- Ensuring the financial equilibrium of the institutions and the safeguarding of the interests of depositors and other creditors.
No Microfinance Institution may oppose a control by the Central Bank under penalty of sanctions.
In the exercise of this mission, it may:
- Conduct document-based and/or on-site inspections at a Microfinance Institution;
- Dispatch inspectors to institutions to carry out any verification it deems necessary;
- Require a distressed institution to submit a recovery plan aimed at restoring its financial equilibrium;
- Issue injunctions or warnings to covered institutions;
- Place it under provisional administration.
Article 4: The Central Bank's inspectors have the right to access all documents and information necessary for the performance of their mission, without professional secrecy being invoked against them.
Article 5: This instruction shall enter into force as of its signature.
Done in Djibouti, on March 14, 2022
The Governor