Over the last one year, SECP has undertaken a thorough revamping of the regulatory framework for non-bank micro finance companies (NBMFCs). Various measures have been taken with the specific objectives of improving ease of doing business by NBMFCs which includes reduction in fees, exemption of ancillary operators from requirements of certain rules and amendments in Fit & Proper criteria, etc.
Under the current regulatory framework, micro financing has become a regulated activity and all the entities other than microfinance banks undertaking micro financing will have to get a license from the SECP to undertake the same. In order to get feedback from the industry participants, the SECP arranged an interactive session at the SECP Head Office Islamabad.
The main objective of the session was to know the practical difficulties that NBMFIs are facing during their registration/licensing and their concerns on the post licensing requirements. The CEO PMN thanked the Commission and Chairman SECP for continued support and guidance during the transition period. Most of the participants raised their concerns about reporting requirements which was adequately explained and responded by SCD team.
The SECP was represented by members from Specialised Companies Division (SCD), Prosecution & Legal Affairs Department (PLAD) & Corporatization and Compliance Department (CCD). 44 participants representing 31 NBMFIs, as well as the CEO and team of Pakistan Microfinance Network attended the session. The SECP assured its support and proactive help in this transition stage to all the participants.
However, it was made very clear to all the participants that in view of the deadline, SECP will initiate strict enforcement actions against those MFIs that fail to apply for licensing before the deadline, already announced. 8 MFIs have already been licensed, 7 are under licensing process while 14 are in registration phase. SECP expects that the licensed NBMFC sector will play a central role in improving access to finance for individuals as well as micro businesses in the country.-PR