RIA NOVOSTI. The government has submitted to the State Duma a draft law on microfinance institutions, the parliaments lower chamber said on its web site. According to the draft law, the full name of which is “On Microfinance Activity and Microfinance Institutions”, a register of companies that engage in microfinance activities will be created in Russia.
The document establishes a legal framework for microfinance activity, determines the procedure for state regulation of activities carried out by microfinance institutions, sets amounts, the procedure for and terms of microloans to be provided, the procedure for acquiring the status and conducting activity of microfinance institutions, and also rights and obligations of an authorized body in charge of microfinance activity.
According to the draft law, “a legal entity registered in the form of a fund, a standalone not-for-profit institution, an institution (except for budget-financed institutions), a non-commercial partnership, an economic entity or a partnership shall be granted the status of a microfinance institution from the day when a record about it is made in the state register of microfinance institutions and shall be deprived of the status of a microfinance institution from the day when data is removed from the state register of microfinance institutions”.
In addition, the draft law does not apply to lending institutions, housing savings cooperatives, professional securities market participants, investment funds, management companies not being professional securities market participants, private pension funds, they carry out microfinance activity in accordance with laws regulating their activities.
Thus, microfinance activity may be carried out by an institution, whose constitutive documents contain a provision that it can engage in such activity and data about which is entered into a respective register. A microfinance institution is intended to provide microloans only in rubles and in amounts not exceeding Rub 1 mln and this amount will be subject to further indexation in line with inflation.