The long awaited regulations for the Microcredit Act 2021, which aims at controlling the activities of micro-finance institutions (MFIs) will be tabled in the House of Representatives today, Tuesday, July 20.
The three sets of regulations to be tabled will cover the areas of: Fees; Licensing; and the requirements for the granting of a licence. After they are approved, micro-financiers will have 12 months in which to submit their licensing applications to the Bank of Jamaica (BOJ).
The Consumer Affairs Commission (CAC), which is an agency of the Ministry of Industry, Investment and Commerce, will create a code of conduct, and generally conduct oversight over the performance of the operators.
The regulations will be tabled in the House of Representatives tomorrow, but are not expected to be debated until the House resumes regular meetings in late August after Parliament’s summer break.
The Act was passed in the Senate with 12 amendments on Friday, January 22, piloted by the Leader of Government Business, Senator Kamina Johnson Smith, three days after it was passed in the House of Representatives on January 19, with the guidance of the Minister of Finance and the Public Service, Dr Nigel Clarke.
It aims to license and regulate microfinance institutions (MFIs) which provide financing to individuals as well as micro, small and medium-sized enterprises (MSMEs).
Government members noted that the rapid expansion of the microcredit industry had given many low-income households an opportunity to join the financial system, while enabling micro and small businesses to access financing. However, they noted that the industry has been largely unregulated and underdeveloped and is in need of legal and regulatory reform.