Decree No. 2021-205 Setting the Minimum Capital and Nominal Value of Shares or Partnership Interests of Microfinance Institutions

REPUBLIC OF MADAGASCAR Freedom - Homeland - Progress

MINISTRY OF ECONOMY AND FINANCES DECREE NO. 2021-205 setting the minimum capital and the nominal value of shares or partnership interests of microfinance institutions

THE PRIME MINISTER, HEAD OF GOVERNMENT,

• Having regard to the Constitution;
• Having regard to Law No. 95-030 of 22 February 1996 on the activity and supervision of credit institutions;
• Having regard to Law No. 2017-026 of 8 February 2018 on microfinance;
• Having regard to Decree No. 2019-093 of 13 February 2019 setting the powers of the Minister of Economy and Finances as well as the general organization of its Ministry;
• Having regard to Decree No. 2019-1407 of 19 July 2019 appointing the Prime Minister, Head of Government;
• Having regard to Decree No. 2020-070 of 29 January 2020, modified and supplemented by Decree No. 2020-597 of 4 June 2020 and No. 2020-997 of 20 August 2020 appointing the members of the Government

On the proposal of the Minister of Economy and Finances, In Council of Government,

DECREES:

Article 1: Subject Matter This Decree sets the implementing provisions of the aforementioned Law No. 2017-026 of 8 February 2018 on microfinance, concerning the minimum capital and the nominal value of shares or partnership interests of microfinance institutions (MFIs).

TITLE I: Minimum Capital Amount

Article 2: Minimum Capital MFIs must possess, on the date of their establishment and on a permanent basis, paid-up share capital with a minimum amount defined below according to their classification:

• two billion ariary (MGA 2,000,000,000) for Deposit and Credit MFIs;
• five hundred million ariary (MGA 500,000,000) for Credit MFIs.

Permanently acquired endowments as well as capital-related premiums are included in the capital calculation.

---

Article 3: MFIs Constituted as a Network For MFIs constituted as a network, the minimum capital level is assessed collectively based on the consolidated financial statements of the network, including the umbrella structure and affiliated mutual MFIs, as provided for in Article 8, paragraph 2 of the aforementioned microfinance Law No. 2017-026.

Article 4: Level of Paid-up Share Capital Upon granting approval as an MFI, the CSBF is authorized to require a level of paid-up share capital higher than the minimum set in Article 2 above, within the limit of the amount necessary to comply with prudential rules and considering the projected financial statements presented in the business plan.

TITLE II: Nominal Value of Shares or Partnership Interests

Article 5: Nominal Value of Shares or Partnership Interests The minimum nominal value of a share for an MFI having the legal form of a joint-stock company is set at twenty thousand ariary (MGA 20,000) and that of a partnership interest for an MFI affiliated and established as a cooperative at five thousand ariary (MGA 5,000).

The provisions relating to the nominal value of shares or partnership interests, according to the legal form stipulated in the preceding paragraph, remain applicable in the event that their eventual subsequent modifications set new thresholds higher than those defined by this Decree.

Shares or partnership interests issued by an MFI must have the same nominal value as that fixed in its Bylaws. The institution shall take the necessary measures to enable the identification of holders of shares or partnership interests.

TITLE III: Miscellaneous Provisions

Article 6: Transitional Provisions MFIs already in operation or approved but which have not yet commenced their operations on the date of entry into force of this Decree in accordance with Article 8 below, have a period of two (2) years from this date to comply with this Decree.

Article 7: Repealed Provisions All prior provisions contrary to the same subject matter are hereby repealed, and in particular those concerning MFIs provided for in Decree No. 2007-013 of 9 January 2007 setting the minimum capital of credit institutions and the nominal value of participation securities.

Article 8: Entry into Force Due to urgency and in accordance with the provisions of Articles 4 and 6, paragraph 2 of Ordinance No. 62-041 of 19 September 1962 on general provisions of domestic law and private international law, this Decree enters into force immediately upon its publication by radio or television broadcast, independently of its insertion in the Official Journal of the Republic.

---

Article 9: Final Provision The Minister of Economy and Finances and the Minister of Communication and Culture are each charged, within their respective areas of responsibility, with the execution of this Decree, which shall be published in the Official Journal of the Republic.

Done in Antananarivo, on 24 February 2021

By the Prime Minister, Head of Government NTSAY Christian

The Minister of Economy and Finances RANDRIAMANDRATO Richard

The Minister of Communication and Culture ANDRIATONGARIVO RAKOTONDRAZAFY Lalatiana

For certified copy, Antananarivo, on 06 APR 2021

THE GOVERNMENT SECRETARY GENERAL RAZANADRAINIARISON Rondro Lucette