HOW A FOREIGN COMPANY MAY OBTAIN A LICENCE FOR DEPOSIT-TAKING MICROFINANCE INSTITUTION IN RWANDA (HOW A FOREIGN COMPANY MAY ESTABLISH DEPOSIT-TAKING MICROFINANCE INSTITUTION IN RWANDA)

Law applicable

• THE CONSTITUTION OF THE REPUBLIC OF RWANDA OF 2003 REVISED IN 2015
• LAW NO 072/2021 OF 05/11/2021 GOVERNING DEPOSIT-TAKING MICROFINANCE INSTITUTIONS
• REGULATION N° 02/2009 ON THE ORGANISATION OF MICROFINANCE ACTIVITY
• LAW NO 007/2021 OF 05/02/2021 LAW GOVERNING COMPANIES
• AMONG OTHERS
• Foreign company: a company incorporated outside Rwanda but which is carrying on business in Rwanda
• supervisory authority is the central bank being National Bank of Rwanda or any other body to which the law may assign the powers to supervise financial service providers in Rwanda
• “Micro finance institution”: any organization that exercises micro finance activities regardless of its legal status, including savings and credit cooperatives
• Deposit-taking microfinance institutions are categorized as a deposit-taking microfinance company or a deposit-taking microfinance cooperative.

Below is the procedure of obtaining a license of deposit taking micro finance institutions by  foreign company in Rwanda;

1. Consult a lawyer about your intention to establish Deposit taking Microfinance institution in Rwanda.
2. Convene a company meeting and pass a resolution to the effect that you intend to set up a deposit taking microfinance institution with a particular capital in Rwanda.
3. Have foreign company documents notarized
4. Decide on type of company to intended to be microfinance
5.  mobiliser capital of at least RWF 300,000,000 for microfinance and register a Local company with the objectives of  carry out financial services in Rwanda.
6. Prepare the specification of the purpose and objectives of the intended microfinance and a business plan including an action plan, Pro forma statements for a minimum period of two years of activity, A manual of procedures that complies with the requirements and a credit policy manual.
7. Photocopy certificate of registration as proof of legal personality.
8.  Indicate the amount of the subscribed capital and the amount of the paid-up capital for each shareholder as well as recent certified balance sheet of every legal entity holding 10 % and more than capital.
9. A company which intends to carry out deposit-taking microfinance institution operations should then prepare its application for a license to the Governor of supervisory authority in the prescribed form and with proof that it has the required minimum paid-up capital.
10. A company which intends to carry out deposit-taking microfinance institution operations should then   pay a prescribed licensing fee.
11. A company which intends to carry out deposit-taking microfinance institution operations should attach all the above documents and submit application in the prescribed form to the central bank for consideration.
12. The supervisory authority/central bank may require the applicant to provide additional information or documents related to the application.
13. The Central Bank/ supervisory authority shall consider the application, issue a decision on the same and give notice of its decision within a time period not exceeding 60 days after an application has been filed in full accordance with the requirements of the law
14. The supervisory authority shall issue the license to the applicant who fulfils all the requirements of this Law and relevant regulations.
15. The persons who will be in charge of administration and management of the microfinance institution, union or federation must demonstrate the highest character and possess technical competency as well as the foresight and integrity needed to exercise these functions.
16. The supervisory authority may reject an application and notify the company the grounds for the rejection of the application.
17. Where the company which applied for the license is not satisfied with the response received, such a company may appeal against it to the supervisory authority within one (1) month of the response receipt.
18. The supervisory authority must provide the company with the response within three (3) months of date on which the appeal was lodged.
19. In case the company which lodged an appeal is further not satisfied with the response provided, such a company has a period of six (6) months from the date of the response receipt to refer the matter to the court of Law.

Author is A regional transactions legal consultant (ADVOCATE) at NOA REGIONAL ASSOCIATED ADVOCATES AND LEGAL CONSULTANTS
Email address: onlinetransactionconsultancy@gmail.comcontacts. +250787311255,+256788105242
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NOTE: whereas the author has made necessary efforts to ensure the accuracy of this post, it is not intended to provide specific legal advice to a particular individual as individual situations may differ. For specific professional/ legal transaction advice on this subject matter and related subject, you may contact the author or contact any transaction legal consultant of your choice.
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