Article 18. Risk management and internal control system of the Law on Microfinance Activities

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1. A microfinance organization (with the exception of a credit partnership and a pawnshop) forms a risk management and internal control system that should include:

1) the powers and functional responsibilities for risk management and internal control of the management body (if any), the executive body, divisions, and their responsibilities;

2) internal risk management and internal control policies and procedures;

3) limits on the allowable amount of risks individually by type of microfinance transactions;

4) internal procedures for reporting on risk management and internal control to microfinance institutions;

5) internal criteria for evaluating the effectiveness of the risk management system.

The procedure for forming a risk management and internal control system for microfinance organizations is established by a regulatory legal act of the authorized body.

2. The authorized body evaluates the compliance of the risk management and internal control system with the requirements established by this article.

3. An internal control service may be established by a credit partnership or pawnshop to monitor its financial and economic activities.

4. The procedure of the internal control service is determined by the legislation of the Republic of Kazakhstan, as well as the rules, regulations and other documents regulating the internal activities of the credit partnership, pawnshop.

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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