Article 14. Licensing of microfinance activities and requirements for managers and founders (participants) of a microfinance organization of the Law on Microfinance Activities

Home / Laws / Article 14. Licensing of microfinance activities and requirements for managers and founders (participants) of a microfinance organization of the Law on Microfinance Activities

1. A legal entity applies to the authorized body for obtaining a license to carry out microfinance activities within six months from the date of its state registration (re-registration) with the Government for Citizens State Corporation as a microfinance organization, credit partnership, pawnshop.

2. A legal entity intending to carry out activities for the provision of micro-loans, in writing or through an electronic document management system, notifies the authorized body, the authorized state body responsible for financial monitoring, of state registration (re-registration) in the State Corporation "Government for Citizens" as a microfinance organization, credit partnership, pawnshop within ten calendar days from the date of this registration.

3. In order to obtain (renew) a license to carry out microfinance activities, in addition to the documents defined by the Law of the Republic of Kazakhstan "On Permits and Notifications", a microfinance organization submits to the authorized body documents confirming compliance with the qualification requirements for licensing microfinance activities in cases specified by the rules for licensing microfinance activities.

The renewal of the microfinance activity license is carried out in the cases provided for in paragraph 1 of Article 33 of the Law of the Republic of Kazakhstan "On Permits and Notifications", as well as changes in the location of the microfinance organization, entailing an increase in the authorized capital.

When a microfinance activity license is being reissued, the compliance of a microfinance organization with the qualification requirements is checked in cases where the basis for the reissue of the license entails a change in the type of microfinance activity or organizational and legal form, or an increase in the authorized capital due to a change in location.

An application for renewal of a license to carry out microfinance activities in the cases provided for in part two of this paragraph shall be submitted by a microfinance organization within thirty calendar days from the date of the changes that served as the basis for the renewal of the license.

4. The authorized body issues a microfinance organization a license to carry out microfinance activities or a reasoned refusal to issue a license to carry out microfinance activities within thirty working days from the date of receipt of the full package of documents.

A copy of the microfinance activity license must be placed in a place accessible to the microfinance organization's clients.

5. The first head and members of the executive body (collegial or sole), members of the supervisory board (if any), members of the board of directors (if any), and the chief accountant are recognized as senior employees of a microfinance organization.

Senior employees of microfinance organizations and self-regulatory organizations in the field of microfinance activities must comply with the requirements of Article 9-4 of the Law of the Republic of Kazakhstan "On State Regulation, Control and Supervision of the Financial Market and Financial Organizations", with the exception of the terms of service specified in paragraph 9 of this Article. If the specified requirements are met, the senior staff of a microfinance organization are appointed (elected) to positions without the consent of the authorized body.

The requirements of the Law of the Republic of Kazakhstan "On State Regulation, Control and Supervision of the Financial Market and Financial Organizations" for members of the Board of Directors also apply to members of the Supervisory Board.

A microfinance organization shall, at the request of the authorized body, dismiss the senior staff of the microfinance organization in case of their non-compliance with the requirements established by Article 9-4 of the Law of the Republic of Kazakhstan "On State Regulation, Control and Supervision of the Financial Market and Financial Organizations".

6. A major participant in a microfinance organization may not be appointed (elected) to the position of head of the executive body of a microfinance organization.

The number of members of the collegial executive body must be at least three people.

The sole executive body consists of one person.

The requirement of the first part of this paragraph does not apply to a microfinance organization established in the form of a business partnership.

A person who is a major participant in a microfinance organization cannot be:

1) is an individual with an outstanding or outstanding criminal record;

2) has registration, place of residence or location in offshore zones, the list of which is established by the authorized body;

3) is a legal entity, the founder (shareholder, participant) or a senior employee of which was previously the first head or founder (participant) of a microfinance organization for a period not more than one year prior to the adoption by the authorized body of a decision to revoke the license of this microfinance organization to carry out microfinance activities on the grounds provided for in paragraphs 1), 1-1), 2), 2-1), 3), 4), 5), 6), 7) and 9) paragraph 2 of Article 16 of this Law;

4) was previously either a major participant – an individual or the first head of a major participant – a legal entity and (or) a senior employee of a financial institution, the head or deputy head of a branch of a non–resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization – a non-resident of the Republic of Kazakhstan, a branch of an insurance broker – a non–resident of the Republic of Kazakhstan in the period not more than one year before the authorized body makes a decision to apply a settlement regime to the bank, a decision to revoke the license of a financial institution, a branch of a non–resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization of the Republic of Kazakhstan, a branch of an insurance broker – a non–resident of the Republic of Kazakhstan or the entry into force of a judicial act on the compulsory liquidation of a financial organization or declaring it bankrupt in accordance with the procedure established by the legislation of the Republic of Kazakhstan, or the entry into force of a judicial act on the compulsory termination of a branch of a non–resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization of a non-resident of the Republic of Kazakhstan in cases established by the laws of the Republic of Kazakhstan. Kazakhstan;

5) is a legal entity whose beneficial owner, determined in accordance with the Law of the Republic of Kazakhstan "On Countering the Legalization (Laundering) of Proceeds from Crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction", has an outstanding or outstanding criminal record for crimes in the field of the legalization (laundering) of proceeds from crime, the financing of terrorism and financing the proliferation of weapons of mass destruction.

7. To comply with the requirement provided for in subparagraph 3) paragraph 2 of Article 9-4 of the Law of the Republic of Kazakhstan "On State Regulation, control and Supervision of the financial market and financial organizations", it is necessary to have work experience for candidates for positions:

1) the head of the executive body, the head of the supervisory board (if any), the head of the board of directors (if any) of a microfinance organization – for at least three years, including at least one year in a senior position;

2) members of the Supervisory Board (if any), members of the Board of Directors (if any), members of the executive body (collegial) – at least two years;

3) chief accountant – at least two years.

For senior employees of a credit partnership and a pawnshop, the length of service provided for in this paragraph is not required.

8. A microfinance organization shall notify the authorized body of changes in the composition of its senior staff within five working days from the date of their appointment (election), transfer to another position, or termination of their employment contract (termination of powers) in accordance with the procedure established by the rules for licensing microfinance activities.

The Law of the Republic of Kazakhstan dated November 26, 2012 No. 56-V.

This Law regulates public relations related to the provision of micro-loans, establishes the specifics of the creation and reorganization of organizations engaged in microfinance activities, the legal status, activities of organizations engaged in microfinance activities, and also defines the specifics of state regulation of organizations engaged in microfinance activities, control and supervision of their activities.

President

Republic of Kazakhstan

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