Circular No. 02/M/18 on the Institutional Transformation of a Microfinance Institution or Community Financial Group, Issued Pursuant to Regulation No. 001/2018 on Microfinance Activities

BANK OF THE REPUBLIC OF BURUNDI
THE DIRECTORATE

Circular No. 02/M/18 on the Institutional Transformation of a Microfinance Institution or Community Financial Group, Issued Pursuant to Regulation No. 001/2018 on Microfinance Activities

Article 1: Object and Scope
This circular aims to specify the procedure and required documents for requesting the institutional transformation of a microfinance institution or a Community Financial Group.

Article 2: Definition
For the purposes of this circular, the following terms apply:
Categorization of institutions exercising microfinance activities:

• First category, Microfinance Enterprises, Financial Cooperative Societies and other types of microfinance institutions
  having the legal form of a public limited company, a public corporation or a mixed company that carry out deposit collection and credit granting operations and provide, on an ancillary basis, other financial services to their clients;
• Second category, Financing and/or Guarantee Funds
  exercising microfinance activities, Microcredit Programs affiliated with Non-Governmental Organizations (NGOs) and Non-Profit Associations (NPA) that grant credits but are not authorized to collect public deposits;
• Third category, Savings and Credit Cooperatives having
  the legal form of a Cooperative Society, which carry out the collection of deposits from their members and grant them credits and provide, on an ancillary basis, other financial services;
• Fourth category, Community Financial Groups
  of the cooperative society type, pre-cooperative groups, village savings associations and as of 10/8/2018

village savings and credit associations that collect contributions from their members and grant them credits according to the agreed approach. The exercise of activities by these associations does not require approval but registration with the Central Bank.

Institutional transformation of a microfinance institution or Community Financial Group, an operation by which a microfinance institution changes its legal form and/or category of microfinance or Community Financial Group of the cooperative type