Procedure for calculating micro-lending companies’ equity approved
Micro-lending companies’ (MLCs) equity (capital) shall total at least 1 million rubles. The procedure and the method for MLC equity calculation have been established by the Bank of Russia’s ordinance sent to the Ministry of Justice for official registration.
This ordinance will become effective and mandatory for MLCs beginning on 1 July 2020 in accordance with last summer’s amendments to the Federal Law ‘On Microfinance Activities and Microfinance Organisations’.
Pursuant to the law, by 2024 MLCs’ equity (capital) shall equal at least 5 million rubles, annually increasing by 1 million rubles from the minimum amount of 1 million rubles required by the regulation to become effective this year.
Devising the procedure for calculating MLCs’ equity (capital), the regulator applied a simplified approach compared to similar requirements for microfinance companies (MFCs).
‘If MLCs have such an amount of equity, this will enhance the sustainability of the microfinance market and ensure the financial stability of its participants’, said Bank of Russia Deputy Governor Vladimir Chistyukhin. ‘In turn, this will promote consumers’ confidence in microfinance organisations’ services, which is essential for the future development of the microfinance market’.