Key data on MFOs’ and CCCs’ operations to become accessible to consumers
Beginning from 1 October 2021, microfinance organisations (MFOs) and large consumer credit cooperatives (CCCs) (numbering 3,000 unit holders and more) will be obliged to regularly disclose the results of their business and financial performance on their official websites and update this information when needed. Such requirements for these market participants are introduced for the first time.
Specifically, they should disclose their procedures for issuing loans and raising funds, organisations’ contacts, including data on executives, as well as information on any orders obliging them to limit disbursements or funds raised. Furthermore, MFOs and CCCs should notify their customers of the complaint procedure in case any issues arise and of the opportunity to apply to the financial ombudsman.
The new requirements will make microfinance institutions’ operations easier-to-understand and more transparent for consumers. Potential customers will be able to make well-informed decisions on depositing their savings, whereas the current investors of microfinance companies and CCCs’ unit holders will be able to participate in companies’ activity more extensively and prevent a potential abuse of power if a particular company has dishonest executives.