Microcredit Bill being finalised, says Shaw
KINGSTON, Jamaica (JIS) — Finance and the Public Service Minister Audley Shaw says a Microcredit Bill, which aims to regulate the microfinance sector, is being finalised for tabling in Parliament shortly.
“This is necessary as Jamaica seeks to expand formal financial inclusion that is consistent with international best practices of transparency,” Shaw said.
He was speaking at a seminar hosted by the education arm of the Jamaica Bankers Association (JBA) on ‘The Evolution and Future of Capital Adequacy Standards’, at The Knutsford Court Hotel in New Kingston yesterday.
The minister informed that consultation on the Bill was held with the Jamaica Association for Micro-Financing on Tuesday, and the Bank of Jamaica (BOJ) has also given feedback.
He said the final draft of the Bill will be presented shortly to the BOJ and other stakeholders for closer examination.
“Time is of the essence,” he said, noting that microfinance “is becoming part of what is on the radar in terms of the de-risking issues that are now affecting the region”.
De-risking refers to international banks cutting corresponding banking relationships with financial institutions in the region in order to reduce reputational risks and be in compliance with international regulations.
When passed, the Bill will, among other things, assist in the registration of microlending companies, which provide financing to the micro, small and medium-sized enterprise (MSME) sector.
It will also allow the entities to be licensed, while also providing measures for the protection of consumers.
The Bill will also enable greater participation of the MSME sector in Government contracts.
The seminar’s main objectives were to explore the role of capital adequacy standards and the global regulatory reporting framework on the financial services sector, and define how changes in credit, market and other types of risk capital fit in the new regulatory environment.
Capital adequacy is the statutory minimum reserves of capital that a bank, or other financial institution, has to hold as required by the financial regulator.
The seminar also included discussions on the implications of capital adequacy standards and International Financial Reporting Standard 9 (IFRS 9) convergence for the financial services and the economy, and explored the future financial services regulatory reporting requirements landscape.
In his remarks, JBA President, Nigel Holness, said the seminar’s staging was timely “coming at a time when the supervisory governance structures and policies are converging”.
Presentations were also made by Manager of Banking Compliance and Risk, IBIS Management Associates Arthur Dania; and Division Chief of the Financial Institution Supervisory Division (FISD) at the BOJ, Dr Jide Lewis.