ALERT ON CHANGES TO MICROFINANCE ACT
New Rules for Microfinance Lending & Recovery
The Business Laws (Amendment) Act 2024, effective December 27, 2024, introduces key changes to the Microfinance Act, focusing on consumer rights and ethical practices.
Lending Transparency
- Provide borrowers with accurate information on lending procedures and conditions
- Clearly disclose all financial costs associated with the loan before disbursement
- Maintain borrower confidentiality
- Inform borrowers of their rights and duties
Ethical Collection & Recovery
- No harassment, abuse, or oppression of borrowers, guarantors, or any other person
- No threats, violence, or illegal means of debt collection
- No obscene or profane language
- All interest, fees, charges, etc. must be prescribed in a written agreement
Compliance & Legal Framework
Non-deposit taking Microfinance Businesses must comply with:
- Article 31 of the Constitution (Right to Privacy)
- The Data Protection Act
Review existing lending procedures, disclosures, and agreements to ensure compliance
