Notice No. 008-04-2020 on Measures for Microfinance Institutions Affected by the COVID-19 Pandemic

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BCEAO
CENTRAL BANK OF WEST AFRICAN STATES

The Governor

NOTICE NO. 008-04-2020 ON MEASURES IN FAVOUR OF MICROFINANCE INSTITUTIONS AFFECTED BY THE COVID-19 PANDEMIC

The Central Bank of West African States (BCEAO) has adopted a series of measures to mitigate the impact of the COVID-19 pandemic on the banking system and economic activity financing within the West African Monetary Union (WAMU). In continuation thereof, the following provisions are specifically adopted in favour of microfinance institutions (MFIs).

1. MFIs are authorized to grant their pandemic-affected clients, upon request, a deferment of loan maturities for a period of 3 months renewable once, without interest charges, fees, or late penalties. In return, receivables subject to deferment must be classified in a specific sub-account within the immobilized credit category for the duration of the deferment. Information regarding deferred receivables must be communicated to the Ministerial Monitoring Structures (MMS).

2. MFIs referred to in Article 44 of the Law on the Regulation of Decentralized Financial Systems that have implemented deferments must also transmit related information to the Central Bank, using the template provided in the dedicated space for the COVID-19 Facility on the BCEAO website, at the address soutien-sfd@bceao.int.

3. The BCEAO will assess, in coordination with the General Secretariat of the WAMU Banking Commission and the MMS, the implications of these measures on the accounting and prudential status of MFIs and will take appropriate decisions as needed.

4. Facilities granted by credit institutions to MFIs are eligible for the provisions of Notice No. 005-04-2020 on the deferment of credit institutions' pandemic-affected receivables. MFIs wishing to do so are consequently invited to approach their banking partners to benefit from the deferment measure for their obligations.

5. In accordance with the provisions of Monetary Policy Committee Decision No. 061-03-2011 dated March 2, 2011, banking credits granted to the microfinance institutions referred to in Article 44 of the aforementioned Law are eligible as collateral for BCEAO refinancing. As an exception, to increase liquidity in favour of the microfinance sector, the special refinancing window for SME-backed instruments is extended to banking receivables held against these MFIs.

For the implementation of this measure, credit institutions will rely on the list of eligible decentralized financial systems (DFS), available from the BCEAO National Directorates.

Issued in Dakar, on April 27, 2020

[Signature]

Tiémoko Meyliet KONE

Avenue Abdoulaye FADIGA
BP 3108 - Dakar - Senegal
Tel. (221) 33 839 05 00 / Fax. (221) 33 823 93 35 courrier.bceao@bceao.int - www.bceao.int