Region

Jurisdiction

Regulator

2022-01-01

Instruction No. 2022-03/IMF on the Opening and Closure of Branches, Agencies, or Service Points of Microfinance Institutions

The Central Bank of Djibouti issued Instruction No. 2022-03/IMF to mandate that microfinance institutions obtain prior authorization for opening or closing branches, agencies, or service points. The regulation establishes minimum operational standards, requiring institutions to implement organizational measures for fund management, prohibit closure-related fees for clients, provide 45 days of written client notification and public press announcements, and subject all closures to internal audit. Additionally, the instruction sets strict physical and security requirements for agency locations and grants a one-year compliance window for pre-existing branches.

Djibouti

Banque Centrale de Djibouti

CENTRAL BANK OF DJIBOUTI

INSTRUCTION NO. 2022-03/IMF ON THE OPENING AND CLOSURE OF BRANCHES, AGENCIES, OR SERVICE POINTS OF MICROFINANCE INSTITUTIONS

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 within 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: Any opening of an agency, branch, or service point by an approved microfinance institution (MFI) shall be subject to the specifications set forth in the annex to this instruction. The provisions contained in these specifications constitute minimum requirements.

Article 2: Microfinance institutions must obtain authorization from the Central Bank for the opening and closure of branches, agencies, or service points.

Article 3: Prior to any temporary or permanent closure of a branch or agency, microfinance institutions must:

implement organizational measures to manage funds held at the branch or agency and process them in accordance with the procedures manual developed for this purpose by the MFI. Microfinance institutions may not impose any fees on clients for the closure or transfer of their accounts.
notify their clients individually through any written communication method at least forty-five (45) days prior to the closure date, and inform the public within the same timeframe via press (newspapers and/or radio/television).

Article 4: Any agency closure operation shall be subject to an audit, the results of which will be included in the annual internal control report of microfinance institutions.

Article 5: This instruction shall enter into force as of the date of its signature. Microfinance institutions have a period of one year from this date to comply with the provisions of the annexed specifications, specifically for agencies opened prior to the entry into force of this instruction.

Done in Djibouti, on March 14, 2022

The Governor

[Signature and seal of the Central Bank of Djibouti]

Annex to INSTRUCTION NO. 2022-03/IMF on the opening and closure of branches, agencies, or service points of Microfinance Institutions

Microfinance institutions must, upon opening the main agency or secondary agencies, comply with the conditions set forth in these specifications regarding location, layout, security, and connectivity:

The premises housing the main agency or secondary agencies must be identifiable to the public and located in an area easily accessible to pedestrians and/or vehicles.
Notwithstanding conditions required under current legislation regarding public reception areas, the premises must be located in an appropriate area away from structures and equipment that may pose a risk (fuel or gas storage facilities, etc.). The floor area of the main agency or secondary agencies must be proportionate to the volume of activity.
The main entrance of the premises housing the main agency or secondary agencies must allow visibility into the lobby designated for public reception.
The premises housing the main agency or secondary agencies must include a customer reception area and counters to provide financial services to the public, visible upon entering the premises;