EXPERIENCE REGULATION PROMOTION OF MICROFINANCE IN NICARAGUA WHAT

EXPERIENCE REGULATION & PROMOTION OF MICROFINANCE IN NICARAGUA

WHAT WILL BE ADRESSED « We are asking you to share the specifically on the policies being implemented and developed to microfinance and small and micro business development in Nicaragua in the last three years: what have been the successes, what are the challenges, what are the next steps » Michelle Scott.

ACHIEVED THROUGH 2012 -2015 MF Activity finally regulated > 40 MF Institutions in the Scope of CONAMI Impact on the economic activity of the country and industry Institutional Advancement of 80% of the Regulatory System = Rules and Regulations Fundraising for Investment Strengthening Industry. Economic, Financial and Own Equity

PURPOSE OF CONAMI 1) Enhance social and financial benefits of Microfinance activity. 2) Promoting financial and nonfinancial services 3) Evaluate financial and social performance of the industry: Set 4) Make Visible Costs and fees charged to the user: Promoting transparency of operations. 5) Set the regulation and supervision of the industry : Create and strengthen the law enforcement body. measurements and standards publications

(FOPROMI) Financial parameters Efficiency and Social Certification: Incentives State Bank ( Produzcamos ): 50 % of its loan Benefits Social Performance Certificates ( DS ) : Social Performance Audit voluntarily. Research teams : Studies and methodologies for promotion strategies and information sector. Fostering alliances Inclusion Finance: Outsourcing services, no correspondent banking.

SCOPE OF SUPERVISION Governance : Membership , disability, integration , roles, notification of charges appointments. Detailed corporate governance policies. BD dismissal of faculty members and Auditors. Internal audit : should report to CONAMI. External audits : mandatory to submit report to CONAMI. Up to two periods. Power of CONAMI of dismissal of members: BD and Auditors. Central Risk : Consultation required with at least one.

Truth in Advertising : ( Beware false expectations !). Obligation to inform customers : Financial conditions Contract Clauses: . Clear and precise. Determination of interest rates: Freely agreed. Moratorium interest rate : Ti + 1/4 of int. Effective interest rate. All fees for p + i , fees, expenses x services. It must be published in simple format.

Active operations : microcredit bank , remittances, exchange currency, investment , fund management , factoring , leasing , micro insurance , syndication, securitization, guarantees. Liabilities operations : No capture public deposits. Loan funds managed , subordinated debts , commercial paper and bonds issued on stock exchange. Capital reserves : 15 % of profits in case SA. Surplus in Companies: Present distribution policy. NGOs incoporate to Equity.

Deposits from the public under any form. Charge prepayment penalties. Loans related: consanguinity, affinity or links. Deduct prepaid interest. Interest rate on total outstanding balance and not debit balance.

New regulatory specialized institution of MF : Differentiation from traditional: Promotion industry, depth and scope, social audit, consumer protection. Institutionalization of the MFI sector : clear game rules, investor confidence , creditors, Benefits : free market rate , collections procedural privileges, amplitude lending and funding. Action plans and strengthening IMF : Fitted to monitoring

CHALLENGES Support Industry in the Topic of Indebtedness Change Registration and Classification Criteria Limit Growth Portfolio Review Regulation with other regulatory institutions and coordination ( including cooperatives ) Public policy platform synergy with state institutions National Tools to increase outreach and DEPTH: Guarantee Funds , Law Guarantees

Rosa Pasos rosapasos@hotmail. com http: //www. conami. gob. ni/