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

Home / RLA / Article 14. Licensing of microfinance activities and requirements for managers and founders (participants) of a microfinance organization 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.

1-1. A legal entity intending to carry out activities to provide micro-loans shall notify the authorized body, the authorized state body responsible for financial monitoring, of state registration (re-registration) with the Government for Citizens State Corporation as a microfinance organization, credit partnership, pawnshop within ten calendar days from the date of this registration.

2. 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.

3. 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.

4. 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.

An individual cannot be a senior employee of a microfinance organization.:

1) has no higher education;

2) does not have an impeccable business reputation;

3) who was previously the head, member of the management body, head, member of the executive body, chief accountant of a financial organization, head or deputy head of a branch of a non-resident bank of the Republic of Kazakhstan, a branch of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, a branch of a non-resident insurance broker of the Republic of Kazakhstan, a major participant – an individual, the head of a major participant (bank holding company) – a legal entity of a financial institution in the period not more than one year before the authorized body makes a decision to classify a bank, a branch of a non-resident bank of the Republic of Kazakhstan as an insolvent bank, branches of non-resident banks of the Republic of Kazakhstan, revocation of the license of a financial institution, a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) non-resident organization of the Republic of Kazakhstan Kazakhstan, a branch of a non-resident insurance broker of the Republic of Kazakhstan, which led to their liquidation and (or) termination of their activities in the financial market, either the entry into force of a court decision on the compulsory liquidation of a financial institution 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 court decision 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.

This requirement is applied within five years after the authorized body makes a decision to classify a bank, a branch of a non-resident bank of the Republic of Kazakhstan as an insolvent bank, branches of non-resident banks of the Republic of Kazakhstan, conservation of an insurance (reinsurance) organization or compulsory purchase of its shares, revocation of the license of a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance company. a non-resident (reinsurance) organization of the Republic of Kazakhstan, a branch of a non-resident insurance broker of the Republic of Kazakhstan, resulting in their liquidation and (or) termination of activities in the financial market, or the entry into force of a court decision on the compulsory liquidation of a financial institution 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 court decision on the compulsory termination of a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) non-resident organizations of the Republic of Kazakhstan in cases established by the laws of the Republic of Kazakhstan;

4) who has had his consent revoked to be appointed (elected) to the position of a senior employee in this and (or) another financial institution, this and (or) another branch of a non-resident bank of the Republic of Kazakhstan, a branch of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, a branch of a non-resident insurance broker of the Republic of Kazakhstan. This requirement is applied during the last twelve consecutive months after the decision of the authorized body to revoke consent to the appointment (election) to the position of a senior employee.;

5) who has committed a corruption offense or has been subjected to administrative punishment before the date of appointment (election) for committing a corruption offense;

6) who was previously the head, member of the management body, head, member of the executive body, chief accountant of a financial organization, major participant (major shareholder) – an individual, head, member of the management body, head, member of the executive body, chief accountant of a major participant (major shareholder) – an issuing legal entity that has defaulted on the payment of coupon interest on issued equity securities for four or more consecutive periods, or whose outstanding amount for the payment of coupon interest on issued equity securities that have defaulted is four times and (or) more than the amount of coupon interest, or the amount of default on payment The principal debt on the issued equity securities is ten thousand times the amount of the monthly calculation index., established by the law on the republican budget on the date of payment. This requirement shall apply for a period of five years from the date of occurrence of the circumstances provided for in this subparagraph.

5-1. A major participant in a microfinance organization cannot 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.

6. 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), 2), 3), 4), 5), 6), 7) and 9) paragraph 2 of Article 16 of this Law;

3-1) 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;

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 a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, a branch of a non-resident insurance broker of the Republic of Kazakhstan for a period not exceeding one year prior to the adoption by the authorized body of a decision on the assignment of a bank, a branch of a bank-non-residents of the Republic of Kazakhstan are classified as insolvent banks, branches of non-resident banks of the Republic of Kazakhstan, revocation of the license of a financial institution, a branch of a non-resident bank of the Republic of Kazakhstan, a branch of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, a branch of a non-resident insurance broker of the Republic of Kazakhstan, or the entry into force of a court decision 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 court decision on the compulsory termination of activities branch of a non-resident bank of the Republic of Kazakhstan, a branch of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan in cases established by the laws of the Republic of Kazakhstan.

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.

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