Regulatory Alerts2023-04-25
Added · Updated
Licensing, Credit Information and Examination Fees of Microfinance Institutions Directive No. MFI/34/2022
The National Bank of Ethiopia establishes fee structures for licensing, credit information, and examinations applicable to all microfinance institutions operating in Ethiopia. New license applications require an investigation fee of Birr 20,000 and a licensing fee of Birr 30,000, while renewals and branch licenses cost Birr 30,000 and Birr 3,000 respectively. Annual examination fees are tiered by asset size, ranging from Birr 25,000 for small institutions to Birr 50,000 for big ones, and credit information fees vary based on loan amounts exceeding Birr 100,000. This Directive repeals specific articles from previous directives and entered into effect on October 5, 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.
- Short Title This Directive may be cited as "Licensing, Credit Information and Examination Fees of Microfinance Institutions Directive No. MFI/34/2022. i • - " s *
- 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