Bank of Russia and market participants discuss revisions to regulation of microfinance institutions
A procedure to regulate pawnshops’ access to the financial market has been developed. An entity may obtain the pawnshop status when it is recorded in the state pawnshop register, and lose this status when its data are struck off the register. This procedure will be enshrined in law by an amendment. The issue, along with other amendments to laws regulating the operations of pawnshops, microfinance organisations, consumer credit cooperatives, agricultural cooperatives, and respective SROs, was discussed by market participants at the expert board meeting held in the Bank of Russia on 20 March 2018.
Other amendments to laws regulating pawnshops’ operations empower the Bank of Russia to approve a pawnticket form and ban these entities from raising funds from households, including individual entrepreneurs other than their founders.
The bill under consideration suggests that all microfinance companies should have official websites in the Russian domain, whereas consumer credit cooperatives counting more than 3000 members should disclose their operations online. Another important development in the laws regulating consumer credit cooperatives is a possible ban for credit cooperatives to change their legal form to continue their operations. Furthermore, the bill requires that a consumer credit cooperative operate collectively. This means that all members of a credit cooperative affiliate with each other based on certain criteria, such as territorial or professional unity, in compliance with the basic SRO standard.
The suggested amendments to the agricultural cooperative laws will introduce a definition of an agricultural consumer credit cooperative as an institution for financial assistance to its members and associate members.
The expert board participants also discussed the development of a stabilisation system for credit cooperatives, which will help restore financial stability of consumer credit cooperatives in crisis.