Directive No. MFI/1/1996 Licensing and Supervision of Micro-Financing Institutions

Directive No. MFI/1/1996
LICENSING AND SUPERVISION OF
THE BUSINESS OF MICRO-FINANCING INSTITUTIONS MINIMUM PAID UP CAPITAL AND INFORMATION REQUIRED FROM APPLICANTS

1. Issuing Authority
   These directives are issued by the National Bank of Ethiopia pursuant to the authority vested in it by Article 41 of the Monetary and Banking Proclamation No. 83/1994 and by Article 5and 12 of the Licensing and Supervision of the Business of Micro-financing Institutions Proclamation No. 40/1996. Minimum Capital An applicant for a license shall have the minimum paid-up capital of Birr 200,000 (Birr Two Hundred Thousand). Information Required from Applicants Evidence for paid up capital which includes certificate of deposit in a blocked subscription account and evidence for valuation of contributions in kind; Memorandum and articles of association and proposed organizational chart of the institution with brief description of the functions of the main organizational units; Proposed name of the institution; Evidence of ownership, possession or lease agreement of an office building for items listed under sec. 10 of the application form attached hereto; Work plan for the first year of operation, stating at least the following; Major financial services to be offered; Overview of the economic conditions of the area in which the institution intends to carry out its business; Business plan covering the mobilization and channeling of funds and the steps to be undertaken to carry out this plan. Monthly cash flow projection for twelve months commencing from the time the institution starts its operations, and balance sheet and income statement projections; Curriculum vitae of the proposed officers and directors including their age, marital status, education, employment history, experience and involvement in financial affairs, civic, social and charitable activities including any leadership position held; and

Duly completed application form as prescribed by the National Bank of Ethiopia and enclosure specified therein. Fees A Micro-financing Institution applying to undertake micro-financing business shall, at the time of lodging an application, pay an investigation fee of Birr 250.- (Birr Two Hundred Fifty); A Micro-financing Institution licensed to undertake micro-financing business shall pay initial registration fee prescribed by the Ministry of Trade and Industry for registration of the Memorandum and Articles of Association; A Micro-financing Institution licensed to undertake micro-financing business shall pay initial license fee of Birr 500.- (Birr Five Hundred); A licensed Micro-financing Institution shall pay annual license renewal fee of Birr 300.- (Birr Three Hundred). These directives shall enter into force as of 21st day of October 1996. Dubale Jale Governor National Bank of Ethiopia APPLICATION FORM FOR A LICENSE TO CONDUCT MICRO-FINANCING BUSINESS

1. Name of applicant, designation and address

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2. Proposed name of institution

3. Address and Proposed branches
   3.1 Head Office
   Location ____________________________
   Postal Address _______________________
   Tel. ________________________________
   Fax. ________________________________
   3.2 Branch address (if any)
   Location ____________________________
   Postal Address _______________________
   Tel. ________________________________

4. Particulars of founders and share holding
   Shares (In Birr) Name Nationality
   Address Subscribed Paid up
   Total

5. Particulars of Directors and the Chief Executive Officer*
   Name Age National Address Number of Shares Held

A. Directors
B. Chief Executive Officer

• Attach C.V. of each Director and Chief Executive Officer

6. Financial services and operation of the institution:
   Financial services the institution intends to carry out ___________________________________________________________________ The manner in which the institution intends to carry out its transactions and operations ___________________________________________________________________ __________________________________________________________________

7. Contributions made in cash and in kind
   In cash Birr ___________________
   Birr)____________________________________)
   7.2 In kind (specify the type of property and value in Birr and the manner of
   valuation)

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8. Initial capital of the institution (in Birr)
   Authorized capital Birr _____________________ (Birr) __________________________) Subscribed capital Birr _____________________ (Birr) __________________________) Paid-up capital Birr ________________________ (Birr) __________________________)
9. Shares
   9.1 Number of shares issued

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9.1.1 Number of shared held by founders

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9.1.2 Number of shares held by subscribers

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Par value of each shares in Birr

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10. Provide information on the manner of acquisition and cost of items listed there
    under*
    Item Manner of acquisition Cost (in Birr) a) Building _____________________ _______________ b) Land ____________________ _______________ c) Vault ____________________ _______________ d) Equipment ____________________ _______________ e) Fixture ____________________ _______________ f) Professional____________________ _______________ Services

• Indicate if any of the items listed are acquired from related parties
  Lease, purchase, rent, ……. etc.

11. Gives statement that members of Board of Directors and Officers are vetted to
    fulfill the requirements stated under Article 18 of Proclamation No. 40/1996. ___________________________________________________________________ ________________________
12. Any other additional statements

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13. Declaration
    I hereby confirm that the forgoing statements are true and correct.

Date ______________________ Signature ___________________

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Name and official designation of the applicant