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Licensing and Supervision of the Business of Micro-Financial Institutions Use of Agents (Directive No. 312/2020)

National Bank Of Ethiopia312/2020

Summary

This directive outlines the framework for the licensing and supervision of micro-financial institutions using agents in Ethiopia.

Who's affected

Micro-financial institutions and individuals or entities acting as agents for these institutions.

Action required

Micro-financial institutions must ensure their agent operations comply with the requirements outlined in this directive.

Key points

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  • Directive No. 312/2020 governs the use of agents by micro-financial institutions.
  • Licensing is mandatory for both micro-financial institutions to use agents and potentially for agents themselves.
  • The directive emphasizes supervision, risk management, and customer protection.
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    • The National Bank of Ethiopia is the regulatory body responsible for enforcement.

Requirements

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  • Micro-financial institutions must obtain a license to use agents.
  • Agents must meet specified eligibility criteria.
  • Contracts between micro-financial institutions and agents must adhere to regulatory standards.
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    • Reporting requirements for agent activities must be fulfilled.
    • Risk management procedures for agent operations must be implemented.

Rights and permissions

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  • Micro-financial institutions have the right to appoint and supervise agents upon obtaining a license.
  • Customers have the right to receive financial services through authorized agents.

Restrictions

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  • Restrictions on the types of services that can be provided by agents.
  • Limitations on the geographical areas where agents can operate.
  • Prohibitions on certain activities for agents.

Penalties

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  • Penalties for non-compliance by micro-financial institutions or agents may include fines, suspension of license, or revocation of license.

Objectives

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  • To establish clear guidelines for the licensing and supervision of micro-financial institutions' use of agents.
  • To ensure the safety and soundness of micro-financial institutions and protect customer interests.
  • To promote financial inclusion through the effective use of agents.

Organizations

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  • National Bank of Ethiopia
Original sourcehttps://justice.gov.et/en/directives/licensing-and-supervision-of-the-business-of-micro-financial-institutions-use-of-agents-directive-no-312-2020/
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