NETWORKS, OVERSEAS BODY, AND FINANCIAL BODY
Institutions operate either independently or within a network.
A network is a group of accredited institutions, driven by a common objective, that have voluntarily decided to join forces in order to adopt a common organization and operating rules. It can be local or national.
Every network must have an overarching body.
The overarching body is an institution with appropriate capital or endowment that is required to fulfill the following prerogatives:
- representing the network to third parties, particularly supervisory and regulatory bodies;
- setting the conditions for membership, exclusion, or withdrawal of affiliates;
- defining and implementing measures necessary to ensure the cohesion of the network and guarantee its financial stability, including compliance with prudential standards by affiliated institutions;
- The exercise of disciplinary power and the implementation of corrective measures and financial penalties imposed on members, as provided for in the network's internal regulations;
- the definition of accounting standards and procedures in accordance with the accounting plan of the profession and the requirements of the supervisory and regulatory authorities;
- the preparation of consolidated financial statements of member institutions' resources;
- the preservation of the network's liquidity;
the organization of financial solidarity among member institutions in the event of the failure of one or more members, while ensuring the presentation of the network's financial equilibrium;
the implementation of an internal control system for the network, in accordance with the requirements of the supervisory authorities;
ensuring compliance with prudential standards by member institutions.
Institutions affiliated with a network are required to fulfill the following obligations:
- Subscribe to the shares of the umbrella organization;
- Contribute to its operating costs;
- Pay a portion of the collected funds to the umbrella organization;
- Participate in the replenishment of the umbrella organization's equity and in covering its net liabilities, if applicable.
The financial body is a credit institution created by a network of institutions. It is authorized and regulated as a credit institution by the banking agreements of 1990 and 1992. It has the option of reinvesting surplus funds from the network.
CONDITIONS SPECIFIC TO PARTICULAR INSTITUTIONS/ORGANISATIONS
The operation of microfinance activities by associations, as defined in Article 1 of these Regulations, is subject to the following conditions:
Members of the association are jointly and severally liable to third parties for the commitments made by the association.
They are required to contribute to the financial stability of their entity.
The withdrawal of a member must not affect the financial stability of the association.
Any indebted member may only withdraw from the association if they have previously fulfilled all their commitments.
The Banking Commission ensures that the associations' bylaws provide for an organizational structure that allows for the determination of the levels of responsibility and control of the institution.
Companies promoting sector-specific loans can create a dedicated structure approved as a microfinance institution (MFI). This structure has a legal personality separate from that of the company that created it.
Sector-specific loan entities that, in addition to lending, also collect savings must establish a dedicated structure responsible for managing these activities.
Institutions in the Second Category can only adopt the legal form of a public limited company.