Bosnia and Herzegovina: Decree on Other General Requirements for Business Operations of a Microcredit Organization

This Decree stipulates in detail general requirements for business operations of a microcredit organization (MCO) that are not prescribed or stipulated by the law or other decrees of the Banking Agency of the Federation of Bosnia and Herzegovina (FBA). It 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 (MCOs), 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;
  • The obligations of the MCF regarding return on assets, operating efficiency, portfolio at risk and write-offs;
  • The sale of shares of an MCF;
  • Ownership shares of an MCF and recapitalization.

The Decree is signed by the President of the Management Board.