On Apr. 9, RUS PRL proposed bill on microfinance property based loan.
RUS PRL issued bill to ban microfinance firms issuing property-based loans to citizens.
Content
Bill will protect citizens from losing their property and limits the potential for fraud.
Requires that companies to use State's information systems, to identify customers.
Imposes strict requirements on the individuals working at microfinance companies.
Proposed ban on loan agreements which use individual's residence as security.
Allows microfinance organizations to delegate customer identification to credit organizations, conduct customer identification through state information systems.
Tightens requirements banning unscrupulous participants from financial market.
Includes rules on business reputation, management qualifications and ownership.
Increases the quality of governance and transparency for microfinance companies.
Raised the threshold for investment being required from microfinance companies.
Own funds threshold of microfinance organizations raised from 10k to 5mn rubles
Minimum loan amount from individual investors doubled from 1.5mn to 3mn rubles.
Jul. 2019 Update
On Jul. 26, 2019, Federation Council approved amendments to provisions of bill that relate to prevention of illegal microfinance activities. at 464th meeting, see #63301.
Aug. 2019 Law Issued
On Aug. 2, 2019, RUS GVT issued law 271-FZ making the relevant amendments.
From Nov. 1, 2019 ban on the conclusion of consumer loan agreements by MFOs with individuals secured by residential premises or a share in them came into force.
From Oct. 1, 2019, protections commence on consumer loans secured by a mortgage.
Remaining provisions come into force on Jan. 30, 2020 and Jul. 1, 2020 except for changes to qualification requirements in Law. 151-FZ, which apply from Jul. 1, 2025.
Regulators
RUS GVT; RUS PRL
Entity Types
B/D; Bank; CNSM; Corp; CU; Depo; MSB; Servicer
Reference
PR, 7/26/2019; Bill 684667-7, PR, 4/9/2019; Law 151-FZ, 7/2/2010; Law 271-FZ, 8/2/2019;
