Licensing, Credit Information and Examination Fees of Microfinance Institutions Directive No. MFI/34/2022

NATIONA L BANK OF ETHIOPIA
\n / ADDIS ABABA
FIS/MFISD/428/2022
October 5, 2022
All Microfinance Institution S.C.
Addis Ababa
Subject: -Directive No. MFI/34/2022
Enclosed herewith, please find "Licensing, Credit Information and Examination Fees of Microfinance Institutions Directive No. MFI/34/2022" for your information and strict implementation. Sincerely-yours Director, Microfinance Institutions Supervision Directorate CC:

H.E The Governor
Vice Governors
Senior Advisor
Advisors
All Directorates
National Bank of Ethiopia
Association of Ethiopian Microfinance Institutions
Addis Ababa
J.P-/.7S: fine-

NATIONA L BANK OF ETHIOPI A hnn / ADDIS ABABA LICENSING AND SUPERVISION OF MICROFINANCE BUSINESS Licensing, Credit Information and Examination Fees of Microfinance Institutions Directive No. MFI/34/2022 Whereas, it is essential that the National Bank has to improve its service quality with a view to satisfy its customers; Whereas, it is found necessary to revise existing fees as well as introduce some new ones on National Bank services provided to microfmance institutions; Now, therefore, pursuant to the power vested in it under Article 5 (Ib), 6(2), 34 (2) and 35 (1) of Micro financing Business Proclamation No. 626/2009 as amended by Microfinance Business (Amendment) Proclamation No. 1164/2019 and in accordance with Article 51 of trie Banking Business Proclamation No. 592/2008 as amended by Banking Business (Amended) Proclamation No. 1159/2019, the National Bank of Ethiopia has issued this Directive.

1. Short Title
   This Directive may be cited as "Licensing, Credit Information and Examination Fees of Microfinance Institutions Directive No. MFI/34/2022. i • - " s *
2. Definition
   For the purpose of this Directive, unless the context provides otherwise:
   2.1 "aggregate loans and advance" mean the sum of all types of loans and advances being
   approved and disbursed to a borrower at one time, or simultaneously;
   2.2 "big, medium or small microIInance institutions" mean category based on asset size to
   which a microfinance institution belongs as assigned by the National Bank from time to time (accordingly, the institutions are categorized in line with Annex-1);
   2.3 "microfinance institution" means a company licensed by National Bank to undertake
   microfinance business;
   2.4 "National Bank" means National Bank of Ethiopia;

2.5 "examination fee" means financial charge for National Bank services provided to
microfmance institutions including on-site examination and off-site surveillance;
3. Scope of the Directive
The provisions of this Directive shall be applicable to all microfmance institutions operating in Ethiopia.
4. Fees
4.1 A microfinance institution applying to obtain new microfmance business license shall pay:
4.1.1 investigation/application fee of Birr 20,000 (twenty thousand Birr), and
4.1.2 licensing fee of Birr 30,000 (thirty thousand Birr).
4.2 A microfinance institution applying for a renewal or replacement of its business license shall
pay renewal/replacement fee of Birr 30,000 (thirty thousand Birr);
4.3 A microfinance institution shall renew its business license every year between August 1 and
October 31.
4.4 A microfinance institution applying for a new branch license or a replacement thereof, shall
pay fee of Birr 3,000 (three thousand Birr) per branch;
4.5 A microfinance institution shall annually pay examination fee of: '
i) Birr 50,000 (fifty thousand Birr) if it is big in size, ii) Birr 37,500 (thirty seven thousand five hundred Birr) if it is medium in size, and iii) Birr 25,000 (twenty five thousand Birr) if it is small in size. *
4.6 A microfinance institution applying to obtain credit information shall pay:
i) no fee for aggregate loans .and advances less or equal to Birr 100, 000 (one hundred thousand Birr) requested; ii) Birr 1,000 (one thousand Birr) for aggregate loans and advances more than Birr 100,000 (one hundred thousand Birr) and less or equal to Birr 1,000,000 (one million 'Birr) requested; and iii) Birr 2,000 (two thousand Birr) for aggregate loans and advances more than Birr 1,000,000 (one million Birr) requested.

'
5. Repeal
5.1) Article 9 of NBE Directive No.MFI/23/2013 is hereby repealed. 5.2) Sub-article 10.1 of Directive No.CRB/02/2019 is hereby repealed.
6. Effective Date
This Directive shall enter into effect as of 5th day of October 2022.
Annex-1
Categorization of Microfinance Institutions
No
1
2
3
Category
Big
Medium
Small
Total Assets Size As of June 30:
Greater or equal to Birr 5 billion
Less than Birr 5 billion, but greater or equal to Birr 0.5 billion Less than Birr 0.5 billion Expected Annual Examination Fee Birr 50, 000.00 Birr 37, 500.00^ Birr 25, 000.00