INSTRUCTION N°005 ON THE FINANCING OF FIXED ASSETS FOR SAVINGS AND CREDIT COOPERATIVES AND MICROFINANCE INSTITUTIONS

INSTRUCTION N° 005 FOR SAVINGS AND CREDIT COOPERATIVES AND MICROFINANCE INSTITUTIONS REGARDING THE FINANCING OF FIXED ASSETS

The Central Bank of Congo,

Having regard to Law No. 005/2002 of May 7, 2002, relating to the constitution, organization, and functioning of the Central Bank of Congo, specifically Article 6;

Having regard to Law No. 003/2002 of February 2, 2002, relating to the activity and control of Credit Institutions, specifically Title III;

Having regard to Law No. 002/2002 of February 2, 2002, laying down provisions applicable to Savings and Credit Cooperatives, specifically Articles 58 to 61;

Having regard to Instruction No. 1 for Microfinance Institutions as modified on December 18, 2005, specifically Article 27;

Hereby adopts the following provisions regarding the financing of fixed assets by Savings and Credit Cooperatives as well as Microfinance Institutions hereinafter referred to as "regulated entities".

Article 1

Fixed assets represent goods and values intended to remain permanently within the regulated entity. They consist of intangible, tangible, and financial fixed assets.

Financial fixed assets are non-current financial assets such as shareholdings, other long-term holdings (more than one year), as well as long-term loans and receivables.

Article 2

Regulated entities are required to finance the fixed assets retained by their prudent own funds.

The retained fixed assets are calculated as follows: – Net immobilized values (Class 2); – Less: Shareholdings in other Credit Institutions or financial institutions (Sub-account 251); – Less: Subordinated receivables in other Credit Institutions or financial institutions (Sub-account 255); – Less: Intangible immobilized values (Account 20).

Article 3

The retained fixed assets of Microfinance Institutions may not exceed fifty percent (50%) of their prudent own funds.

Article 4

The retained fixed assets of Savings and Credit Cooperatives may not exceed fifty percent (50%) of their prudent own funds.

For Savings and Credit Cooperatives licensed on the date of entry into force of this instruction, the ratio must decrease from 100% to 75% and then to 50% at the end of each civil year from the signing of this instruction.

For networks, this ratio is calculated on a non-consolidated basis.

Article 5

Regulated entities are required to comply with the provisions of this Instruction.

Article 6

Failure by regulated entities to comply with the provisions of this Instruction exposes offenders to the sanctions provided for by the legal and regulatory provisions in this matter.

Article 7

The provisions of this Instruction enter into force on the date of its signature.

Done in Kinshasa, on April 14, 2012

J-C. MASANGU MULONGO Governor