Islamabad, March 22(Online): The Securities and Exchange Commission of Pakistan (SECP) recently revamped its regulatory structure for non-banking finance companies (NBFCs) by amending Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, and Non-Banking Finance Companies and Notified Entities Regulations, 2008.
In order to meet the financing needs of microenterprises and low-income persons, the SECP has introduced a new class of NBFCs, i.e. non-bank micro finance companies (NBMFCs) and a comprehensive framework has been introduced to provide financial facilities to microenterprises as well as poor persons, including conduct requirements for the same.
Under the new regulatory regime, micro lending has become a regulated activity and all the entities other than microfinance banks undertaking microfinance business will have to get a license from the SECP to undertake the same.
In order to create awareness about the newly amended regulatory framework for NBMFCs.
The SECP arranged a conference at the SECP head office, where the SECP was represented by officers of the Specialized Companies Division (SCD), Prosecution and Legal Affairs Department (PLAD) and Corporatization and Compliance Department (CCD).
About 40 participants from different institutions, including the CEO of Pakistan Microfinance Network and officials of Pakistan Poverty Alleviation Fund attended the conference.
The main objective of the interactive session was to create awareness about new regulatory regime for NBMFCs, getting feedback from industry participants to know their concerns/practical difficulties and addressing their concerns and queries for smooth transition of unregulated MFIs into regulated NBMFCs.
The SCD team briefed the participants on the salient features of the regulatory framework.
Their queries were answered and it was made clear to all participants that after the introduction of new regulatory regime, micro-lending has become a regulated activity and all the institutions undertaking microfinance business (other than microfinance banks) will have to come within the SECP’s regulatory ambit and any violation of the same will be tantamount to a criminal offence.
The SECP assured its support and proactive help in this transition stage to all the participants.