Paper
Pakistan: Criteria and Conditions for Grant of Licence for Establishing Microfinance Banks/Institutions
Regulation and supervision of microfinance banks/microfinance institutions in Pakistan
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9 pages
This Directive states that the microfinance banks/ microfinance institutions (MFB/ MFI) shall be companies public or private incorporated in Pakistan under Companies Ordinance 1984. The Directive:
- Specifies the minimum paid-up capital and that 51% should be subscribed by the promoters;
- Stipulates the provisions regarding the following for Sponsor Director:
- Minimum number;
- Net worth;
- Commitment letters;
- Provisions for disqualification.
The Decree proceeds by stating that:
- No person can be on the board of more than one MFB/MFI;
- Chief Executive should be a professional with sufficient experience;
- MFI must commence operation within six months of the grant of license by the State Bank of Pakistan (SBP);
- Applicant should submit requisite documents;
- Applicant should deposit a pay order or demand draft of Rs.500,000.
The Law also makes it mandatory for the MFB/MFI, which may be permitted to be established, to comply with:
- Provision of Microfinance Institution Ordinance 2001;
- Rules regulations framed under it;
- SBP directives to be issued from time to time.
Finally, the Law concludes by stating that a MFB/MFI may be established by applying to the Director.
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