Law on Microcredit Organizations

This document is the official law on microcredit organizations for the Serbian Republic in Bosnia-Herzegovina. It stipulates the establishment, activity, form of organization and registration, the operations, method of governance, supervision of operations, and termination of operations of microcredit organizations (MCOs).

The law makes the following statements:

• An MCO is a non-depositary financial organization having the provision of microcredit as its core activity.
• The microcredit activity aims to:
  • Improve the financial position of beneficiaries;
  • Increase employment;
  • Provide support to entrepreneurship development and profit realization.
• An MCO may operate as a microcredit company or as a microcredit foundation:
  • A microcredit company may disburse a maximum of KM 50,000 as microcredit;
  • A microcredit foundation has a maximum limit of KM 10,000.

The law goes on to provide for the following:

• The establishment of MCOs and their activities;
• Terms for reporting and audit;
• Control of MCOs and withdrawal of the permit;
• Forms of organizing microcredit organizations;
• Penalty provisions;
• Transitional and closing provisions.