INGOs and NGOs Providing Microfinance Services Are Required to Transform Into Corporate Entities in MyanmarJune 29, 2019
On 4 June 2019, the Financial Regulatory Department (“FRD”) issued a letter (“Letter”) directing International Non-Governmental Organizations (“INGOs”) and Non-Governmental Organizations (“NGOs”) which provide microfinance services to register as companies and apply for fresh Microfinance Business License (“MFI License”).
MFI License issued previously
Pursuant to the Letter, FRD had previously issued MFI Licenses to 3 INGOs, 16 NGOs, 47 foreign companies, 110 local companies, and 5 partnership firms in accordance with the Microfinance Business Law, 2011 (“MFI Law”).
Content of the Letter
The Letter states that the FRD had requested comments from the Union Attorney-General Office (“AGO”) and the Ministry of Home Affairs (“MoHA”) on whether the INGOs and NGOs holding MFI License should be allowed to engage in microfinance business activities.
To this, the AGO and the MoHA clarified that INGOs and NGOs registered as associations in accordance with the Registration of Associations Law (“Associations Law”) should not provide microfinance services.
Conclusion by AGO and MoHA
The AGO and MoHA also mentioned that if such licensed NGOs and INGOs wish to provide microfinance services, they should register as a company in accordance with the Myanmar Companies Law 2017 and apply for a fresh MFI License in accordance with the MFI Law.
Notification to existing INGOs and NGOs
The Letter notifies 19 INGOs and NGOs that intend to continue providing microfinance services in Myanmar to re-register as an entity in Myanmar and thereafter apply for a fresh MFI License.