The Control over Microfinance Activities

The meeting of the Supreme Council was held online today. One of the documents considered by the parliamentary corps was law-in-draft with amendments to the law “On microfinance activities and microfinance organizations”. The law came into force on January 1, 2021.

Deputy Yuriy Kucherenko proposed to make a number of amendments to the law that specifies some of the provisions of the document. In addition, it was proposed to make additions to the law "On the Central Bank of the PMR", since the PRB is empowered to control the microfinance sector.

Such credit institutions and pawnshops do not need to apply for registration with the PRB or change anything in their activities from February 1. Their work is regulated by the PMR legislation that regulates the activities of such legal entities, including the law “On banks and banking activities” and subordinate acts.

The Supreme Council adopted amendments to the law “On microfinance activities and microfinance organizations” and “On the central bank of the PMR” in the first reading. Work on these legislations will continue.

Let us remind you that until now our legislation allowed us to conduct activities related to the provision of microloans without registering with the Central Bank. A separate law was needed in order to avoid cases of abuse when interest rates are set too high on microloans, which become unaffordable for borrowers.

The procedure and conditions for the provision of microloans, as well as the conditions for the creation, operation and reorganization of microfinance organizations are spelled out in the law.