HARARE – Government has rolled out the new amendments to the Microfinance Act.
This comes as government sought to create credit and collateral registries as well as encourage consolidation among small businesses in order to enhance the operation of microfinance institutions (MFIs).
Government had also been implored to address shortcomings of the previous Microfinance Act providing for perpetual licences for deposit takings for MFIs and extending the tenure of the licence for the credit-only microfinance institutions.
Following the bids by microfinanciers, government last Friday gazetted the Microfinance Amendment Bill stating that the Bill will amend the Microfinance Act (Chapter 24:30) extending the tenure of licences to a five-year period, removing perpetual registrations and renewals.
The new Section 10A will specify a five-year period of registration by credit-only MFIs and indefinite registration for deposit-taking microfinance institutions.
At the present all institutions are registered for one calendar year only. “They will apply at least three months before expiry of their registration and will be obliged to disclose any material changes in the particulars they gave the Registrar when they were granted registration or when their registration was last reviewed, the Microfinance Amendment Bill read.
Meanwhile the Bill also reduces the variety of institutions that can carry on microfinance business under the Act.
At present the Act envisages four different types of institutions namely corporate financiers, credit-only microfinanciers, deposit-taking microfinanciers and money-lenders, who provide loans and credit but are not micro-financiers.