Decree on Other General Requirements for Business Operations of a Microcredit Organization

Bosnia and Herzegovina

(enacted in 2007)

Decree on Other General Requirements for Business Operations of a Microcredit Organization of 2007 stipulates in detail general requirements for business operations of a microcredit organization (MCO) that are not prescribed or stipulated by law or other decrees of the Banking Agency of the Federation of Bosnia and Herzegovina (FBA).

The decree comprises the following four parts:

  • General provisions;
  • Notification, that specifies the time by which the MCO has to:
    • Notify the FBA;
    • Submit the decision on incorporation if it is a joint stock company;
  • Business operations with related persons that:
    • Prescribes minimum standards for business operations of the MCO with persons related with the MCO;
    • States the meaning of ‘significant ownership interest’;
    • Sets out: 
      • Deterrents to MCO organized as microcredit foundations (MCFs) or microcredit companies (MCCs);
      • Minimum requirements regarding transactions, voting rights, information regarding transactions, reporting, etc;
      • Discusses the written order that the FBA can issue for MCFs with donated capital, operating with loss; 
  • Other restrictions and other requirements for business operations that include specifications about:
    • Total capital of the MCO, investment in fixed assets, use of profits and plans for the use of funds;
    • Obligations of the MCF regarding return on assets, operating efficiency, portfolio at risk and write-offs;
    • Sale of shares of a MCF; and
    • Ownership shares of a MCF and recapitalization.