Related documents
- Is amended by Microfinance Amendment Act, 2019
Zimbabwe
Microfinance Act
Chapter 24:29
- Commenced on 30 August 2013
- [This is the version of this document from 19 November 2019.]
- [Note: This version of the Act was revised and consolidated by the Law Development Commission of Zimbabwe. This version is up-to-date as at 31st December 2016.]
- [Amended by Microfinance Amendment Act, 2019 (Act 6 of 2019) on 19 November 2019]
Part I – Preliminary
1. Short title
This Act may be cited as the Microfinance Act [Chapter 24:29].2. Interpretation
In this Act—“associate”, in relation to a microfinance institution, means—(a)its subsidiary, as defined in section 143 of the Companies Act [Chapter 24:03]; or(b)any company of which the microfinance institution is the single largest shareholder; or(c)its holding company, as defined in section 143 of the Companies Act [Chapter 24:03]; or(d)where the microfinance institution is itself a subsidiary of a holding company, as defined in section 143 of the Companies Act [Chapter 24:03], any other such subsidiary of the same holding company; or(e)any person who has power, directly or indirectly, to control the microfinance institution’s management or policies;[definition of “associate” inserted by section 2(a) of Act 6 of 2019]“board”, in relation to a microfinance institution, means the board referred to in section 20;[definition of “board” amended by section 2(b) of Act 6 of 2019]“borrower” means a person to whom a microfinance institution makes a loan or provides a credit facility, and includes a person to whom such a borrower’s rights and liabilities have passed, whether by assignment, delegation, cession or otherwise;[definition of "borrower" amended by section 35 of Act 6 of 2019]“chief accounting officer”, in relation to a microfinance institution, means a person who is responsible, under the direct authority of the institution’s chief executive officer, for—(a)preparing and maintaining the institution’s books of accounts and other financial records;and(b)ensuring that the institution has systems of internal financial control that comply with this Act and any other enactment;“chief executive officer”, in relation to a microfinance institution, means a person who is responsible, under the direct authority of the institution’s board, for conducting the institution’s microfinance business;[definition of “chief executive officer” amended by section 35 of Act 6 of 2019]“company” means company incorporated or registered under the Companies Act [Chapter 24:03];“corporate microfinancier” [definition of “corporate microfinancier” repealed by section 2(c) of Act 6 of 2019]“credit-only microfinance business” means the business of providing loans or other credit facilities to persons who, for the most part—(a)operate micro-enterprises, small enterprises or medium enterprises as defined in section 2 of the Small and Medium Enterprises Act [Chapter 24:12]; or(b)are individuals whose monthly income is below the poverty datum line or belong to households whose combined monthly income does not exceed five times the poverty datum line, as fixed by the Zimbabwe National Statistics Agency in terms of the Census and Statistics Act [Chapter 10:29];and who are not shareholders or members of the person providing the loans or credit facilities;[definition of “credit-only microfinance business” substituted by section 2(d) of Act 6 of 2019]“credit-only microfinance institution” means a microfinance institution which conducts credit-only microfinance business;[definition of “credit-only microfinance institution” inserted by section 2(d) of Act 6 of 2019]“deposit” means an amount of money, whether made up of Zimbabwean or foreign currency or both, cheques or other negotiable or non-negotiable instruments, which a microfinance institution accepts for credit to an account in its books or those of another financial institution, but does not include money paid as security for performing a contract;“deposit-taking microfinance business” means the business of accepting deposits from persons who, for the most part—(a)operate micro-enterprises, small enterprises or medium enterprises as defined in section 2 of the Small and Medium Enterprises Act [Chapter 24:12]; or(b)are individuals whose monthly income is below the poverty datum line or belong to households whose combined monthly income does not exceed five times the poverty datum line, as fixed by the Zimbabwe National Statistics Agency in terms of the Census and Statistics Act [Chapter 10:29];where the depositors are not shareholders or members of the person accepting the deposits;[definition of “deposit-taking microfinance business” substituted by section 2(e) of Act 6 of 2019]“deposit-taking microfinance institution” means a microfinance institution which prioritises deposit-taking microfinance business and issuance of loans;[definition of “deposit-taking microfinance institution” inserted by section 2(e) of Act 6 of 2019]“disciplinary committee” means the committee appointed in terms of section 45;[definition of “disciplinary committee” inserted by section 2(f) of Act 6 of 2019]“financial institution” has the meaning given to that phrase by or under the Banking Act [Chapter 24:20];“financial year”, in relation to a microfinance institution, means the period of twelve months ending on the 31st of December in any year;[definition of “financial year” amended by section 35 of Act 6 of 2019]“inspector” means a person appointed as an inspector in terms of section 43;[definition of “inspector” amended by section 35 of Act 6 of 2019]“loan agreement” means a contract under which a microfinance institution makes a loan or advances credit to a borrower;[definition of “loan agreement” amended by section 35 of Act 6 of 2019]“material change”, in relation to the particulars on the basis of which a microfinance institution is registered, means a change of ownership or control (including amalgamation with or significant transfer of its assets and liabilities to, another microfinance institution or person), directors, name or legal status of the microfinance institution, or any change in the scope of its business;[definition of “material change” amended by section 35 of Act 6 of 2019]“microfinance business” means credit-only microfinance business or deposit-taking microfinance business;[definition of “microfinance business” substituted by section 2(g) of Act 6 of 2019]“microfinance institution” means a person that conducts microfinance business;[definition of “microfinance institution” substituted by section 2(g) of Act 6 of 2019]“microfinancier” [definition of “microfinancier” repealed by section 2(h) of Act 6 of 2019]“micro-enterprise”, “small enterprise” and “medium enterprise” [definition of “micro-enterprise”, “small enterprise” and “medium enterprise” repealed by section 2(h) of Act 6 of 2019]“minimum capital” means capital representing a permanent commitment of funds by the shareholders of the deposit-taking microfinance institution (net of any loans and advances given to an insider and borrowed capital) which is available to meet losses incurred without imposing a fixed unavoidable charge on the institution’s earnings, and includes such of the following elements as are available to the institution after making any required deductions—(a)issued and fully paid up ordinary shares or common stock;(b)paid up non-cumulative irredeemable preference shares;(c)reserves consisting of—(i)non-repayable share premiums;(ii)disclosed reserves created by a charge to net income in the financial year immediately preceding the current one;(iii)published retained earnings for the current year, including interim earnings, where these have been verified by external auditors; and(iv)such other elements as may be prescribed from time to time;[definition of “minimum capital” inserted by section 2(i) of Act 6 of 2019]“Minister” means the Minister of Finance or any other Minister to whom the President may, from time to time, assign the administration of this Act;“moneylender” [definition of “moneylender” repealed by section 2(h) of Act 6 of 2019]“moneylending business” [definition of “moneylending business” repealed by section 2(h) of Act 6 of 2019]“Register” means the Register of Microfinance Institutions kept in terms of section 9;[definition of “Register” amended by section 35 of Act 6 of 2019]“registered” in relation to a microfinance institution, means registered in terms of section 7;[definition of “registered” amended by section 35 of Act 6 of 2019]“Registrar” means the Registrar of Microfinance Institutions appointed in terms of section 4(1) or any person performing his or her functions in terms of section 4(3);[definition of “Registrar” amended by section 35 of Act 6 of 2019]“registration certificate” means a registration certificate issued in terms of section 8(2);“Reserve Bank” means the Reserve Bank of Zimbabwe established by the Reserve Bank of Zimbabwe Act [Chapter 22:10] (Act No. 5 of 1999);“Secretary” means the Secretary of the Ministry for which the Minister is responsible;[definition of “Secretary” amended by section 35 of Act 6 of 2019]“supervisor” means a person appointed or deemed to have been appointed as a supervisor in terms of section 43;"undesirable method of conducting business” means the conduct of microfinance business in a manner that does not comply with any provision of the First Schedule.[definition of "undesirable method of conducting business” substituted by section 2(j) of Act 6 of 2019]3. Application of Act
Part II – Administration
4. Registrar of Microfinanciers and other officers
5. Exercise of functions by Registrar
5A. Microfinance Advisory Council
Part III – Registration of microfinanciers
6. Prohibitions in relation to conduct of microfinance business
7. Application for registration as microfinancier
8. Registration of microfinanciers
9. Register of microfinanciers
10. Period of registration
10A. Renewal of registration of credit-only microfinance institution
11. Amendment of registration
12. Cancellation of registration
13. Public notice of registration and cancellation of registration
14. Effect of cancellation of registration
Part IV – Conduct of microfinanciers generally
14A. Annual fee payable by microfinance institutions
15. Information to be displayed or published by microfinanciers
16. Requirements for agreements
17. Microfinance Institutions code of conduct
Every microfinance institution shall comply with the code of conduct set out in the First Schedule.[section 17 amended by section 35 of Act 6 of 2019]Part V – Conduct of corporate microfinance business
18. ***
[section 18 repealed by section 14 of Act 6 of 2019]19. Conduct of microfinance and other business by microfinance institutions
Subject to this Act, every microfinance institution shall conduct its microfinance business and other operations in accordance with sound administrative and accounting practices and procedures, adhering to proper risk-management policies, and shall comply with the terms and conditions of its registration and with any directions given to it by the Reserve Bank or the Registrar in terms of this Act.[section 19 amended by section 35 of Act 6 of 2019]20. Board of corporate microfinancier
20A. Responsibilities of directors and shareholders of microfinance institutions
20B. Corporate governance
20C. Compliance function
20D. Risk committee
21. Records of transactions
22. Accounts and financial records of corporate microfinanciers
23. Audit of accounts of microfinance institutions
Part VI – Provisions applying specifically to microfinance institutions
24. ***
[section 24 repealed by section 18 of Act 6 of 2019].25. Restriction on type of business that may be carried on by microfinance institutions
26. Requirements for lending by microfinance institutions
27. Employees and agents of microfinance institutions
Every microfinance institution shall ensure that all its employees and agents engaged in soliciting concluding and enforcing loan agreements are given adequate instruction in the requirements of this Act.28. Restriction on payment of dividends by microfinance institutions
A deposit-taking microfinance institution shall not pay a dividend to its shareholders unless it has made adequate provision against losses on loans and has taken adequate steps to ensure compliance with the financial requirements specified in this Act.[section 28 amended by section 35 of Act 6 of 2019]29. Restriction on other business that may be carried on by microfinance institutions
30. Restriction on microfinance institution extending credit to officers, employees and certain shareholders and their relatives
31. Principal officers of microfinance institutions
32. Alteration of memorandum or articles of association by microfinance institution
33. Minimum capital and reserves of microfinance institutions
34. Limits on shareholding and transfer of shares in microfinance institutions and corporate microfinanciers
35. Curatorship arid winding up of microfinance institutions
Every deposit-taking microfinance institution shall be required to be a contributor for the purpose of the Deposit Protection Act [Chapter 24:29] (Act No. 7 of 2011) and accordingly that Act’s provisions for curatorship, insolvency and winding up of contributors shall apply.[section 35 amended by section 26 and 35 of Act 6 of 2019]Part VII – Supervision of microfinanciers
36. Responsibilities of Reserve Bank
37. Action that may be taken by Reserve Bank where microfinancier found to have contravened the Act or condition of registration, etc
38. Investigation into microfinance institution
39. Procedure on completion of investigation
40. Action by Reserve Bank following investigation
41. Expenses of investigation
42. Statements and reports to be submitted by microfinance institutions
43. Appointment of supervisors and inspectors
Part VIII – Enforcement of microfinanciers’ code of conduct
44. ***
[section 44 amended by section 35 of Act 6 of 2019 and repealed by section 30 of Act 6 of 2019]45. Disciplinary committee
For the purpose of an investigation and hearing in terms of this Part there shall be a disciplinary committee composed of—46. Complaints against microfinanciers and initial investigation by disciplinary committee
47. Notice of complaint or of allegation of undesirable method of conducting business
Upon a finding in terms of section 46(4), the disciplinary committee shall notify the microfinance institution concerned in writing of the complaint or allegation against it and of the grounds on which the committee considers there is a prima facie case against the microfinance institution, and in that notice shall—48. Determination of complaint or allegation
49. Offences in connection with investigations under this part
A person subpoenaed in terms of section 48(4)(a) shall obey the subpoena served on him or her, and any such person who, without just cause—Part IX – General
50. Appeals
51. Extension of time-limits
If a microfinance institution is required to comply within a specified or prescribed period with any provision of this Act, or with any direction or requirement of the Registrar in terms of this Act, the Registrar may, on good cause shown, extend the period at the request of the microfinance institution concerned.[section 51 amended by section 35 of Act 6 of 2019]52. Translations of documents, etc, may be demanded
Where any person for the purposes of this Act, submits any statement, document or other information to the Reserve Bank or the Registrar in a language other than the English language, the Reserve Bank or the Registrar, as the case may be, may direct him or her to provide, at his or her own expense, a translation of the statement, document or information, and until the person concerned complies with the direction the statement, document or information shall be deemed not to have been submitted for the purposes of this Act.53. Powers of Registrar where unregistered person is suspected of conducting microfinance business
54. Preservation of secrecy and use of confidential information for personal gain
55. Reserve Bank and Registrar may supply statistics
For the purposes of the Census and Statistics Act [Chapter 10:29] (Act No. 1 of 2007), the Reserve Bank and the Registrar shall supply the Director-General of the Zimbabwe National Statistics Agency such statistics relating to microfinance institutions in Zimbabwe as may be required by or under the Census and Statistics Act [Chapter 10:29], but no such statistics shall reveal confidential information concerning any particular microfinance institution or other person.[section 55 amended by section 35 of Act 6 of 2019]56. Annual reports of Reserve Bank and Registrar
57. Exercise of functions by Reserve Bank and Registrar
58. Evidence and presumptions
59. Amendment or substitution of First and Second Schedules
60. Regulations
61. Amendment of Cap. 14:14
The Moneylending and Rates of Interest Act [Chapter 14:14] is amended—62. Amendment of Cap. 24:20
The Banking Act [Chapter 24:20] is amended—63. Transitional provision
Any person who, immediately before the date of commencement of this Act, was conducting any business for which he or she is required to be registered under this Act may continue to conduct that business—History of this document
19 November 2019 this version
Amended by
Microfinance Amendment Act, 2019
31 December 2016
Consolidation
Read this version
30 August 2013
Commenced
Cited documents 5
Act 5
1. | Census and Statistics Act | 2 citations |
2. | Reserve Bank of Zimbabwe Act | 2 citations |
3. | Banking Act | 1 citation |
4. | Deposit Protection Corporation Act | 1 citation |
5. | Small and Medium Enterprises Act | 1 citation |