Guidelines on Implementing the Decree on Microfinance Institutions
关于实施《微型金融机构法令》的指导意见
ຄຳແນະນຳ ວ່າດ້ວຍການຈັດຕັ້ງປະຕິບັດ ດຳລັດວ່າດ້ວຍສະຖາບັນການເງິນຈຸລະພາກ
Summary
This guideline aims to clarify certain provisions of the Decree on Microfinance Institutions to ensure uniform implementation nationwide, covering establishment approval, registered capital, foreign ownership ratio, business scope, supervision, and penalty handling for deposit-taking and non-deposit-taking microfinance institutions and microfinance projects.
Articles
Article 1
Purpose. This guideline is formulated to clarify certain provisions of the Decree on Microfinance Institutions, making them more explicit, in order to ensure the uniform implementation of this Decree nationwide.
Article 2
Definition of Terms. The terms used in this Guidance have the following meanings: 1. Fixed capital means buildings and land; 2. Physical capital means capital that serves as fixed assets, such as vehicles, computers, desks, and chairs; 3. Working capital means capital in monetary form; 4. Branch means a part of a microfinance institution authorized to conduct business within its scope of authority, which may be established within the limits agreed by the Bank of the Lao PDR, with the head office located in Vientiane Capital or other provinces; 5. Service point means a part of a microfinance institution authorized to conduct a certain portion of business, which shall be based on the delegation of its head office and subject to the agreement of the Bank of the Lao PDR; 6. Micro-loan means a small loan with a maximum amount not exceeding fifty million (50,000,000) Kip; 7. Related party means: — an audit firm or auditor performing audit functions on the accounts of a microfinance institution; — an individual or enterprise holding more than ten percent (10%) of the capital of a microfinance institution; — a company in which a board member, management, or responsible person, or an employee responsible for loan evaluation and approval works, as well as immediate family members (e.g., father, mother, adoptive parents, spouse, stepchildren, adopted children, or siblings) and collateral relatives (e.g., son-in-law, daughter-in-law, father-in-law, mother-in-law, uncles, aunts) of board members, management, or responsible persons holding ten percent (10%) or more of shares in a microfinance institution; — a legal entity in which a microfinance institution holds shares; 8. Normal loan means a loan that can be fully repaid in accordance with the contractual conditions; 9. Non-performing loan means: — a loan where all or any part of the principal and interest has not been repaid according to the established repayment schedule, with arrears starting from thirty-one (31) days; — a loan restructured for a one-year period where all or any part of the principal and interest has not been repaid according to the established schedule, with arrears starting from thirty-one (31) days. 10. Accounting documents mean general ledgers, journals, cash records, various account vouchers, and other accounting documents, whether recorded manually, by computer, or by other systems used by the microfinance institution; 11. Agent means an individual or legal entity acting as a representative of a person or legal entity to conduct business, negotiate, enter into contracts, and/or handle various transactions; 12. Relevant authorities mean: law enforcement officers, judicial bodies, administrative agencies, and other related parties; 13. Temporary operating license means a letter of principle confirmation enabling the operating license applicant to prepare all necessary conditions, such as equipping technical equipment, personnel, and paying registered capital. The temporary license is valid for ninety (90) days; 14. Permanent operating license means a license formally authorizing the conduct of microfinance business; 15. Cash on hand means cash held by deposit-taking and non-deposit-taking microfinance institutions.
Article 3
Scope of application. These guiding regulations apply to deposit-taking microfinance institutions, non-deposit-taking microfinance institutions, microfinance projects, and the branches and service points of the aforementioned microfinance institutions.
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