Uganda: Microfinance Deposit-taking Institutions Regulations 2004

Regulations on licensing microfinance deposit-taking institutions
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This document is a compilation of information on different statutory instruments for regulating the microfinance institutions (MFIs) in Uganda. In particular, it emphasizes on the following instruments:

  • Licensing;
  • Liquidity and funds management;
  • Capital adequacy;
  • Asset quality;
  • Reporting as a mechanism to regulate the microfinance deposit-taking institutions.

The document states the objectives of the regulation as:

  • To enable the Central Bank (CB) to supervise institutions by means of accurate and timely financial data and other information from the institutions;
  • To enable the CB to gather a comprehensive and accurate database of the activities of institutions to be used for policy making in promoting economic growth and stability in Uganda.

The document outlines the criteria under which licenses can be granted, the procedure for application and revoking the license.

  • It stresses on the utility of each instrument for ensuring a sound financial system in the country;
  • It lists the kinds of penalties and sanctions that are likely to be invoked in case of violation of this regulation.

Finally, it provides information on the time-period and the format for furnishing information to the CB, these include reporting on:

  • Weekly basis - Liquidity statements;
  • Monthly basis:
    • Statement of assets and liabilities;
    • Computation of capital adequacy;
    • Statement of income and expense;
    • Reports of portfolio quality returns;
    • Schedule of loans extended to insiders;
    • Schedule of provision of bad debts.

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