Consumer Education - Lending Activities
A micro loan is a short term unsecured credit that should be paid off from reliable source of cash flows such as salary. It is different from Micro Finance which is structured to finance small businesses and paid off from the sales proceeds.
Micro Lending: Micro-lending is regulated under the provisions of the NBFIRA Act, 2006 and it’s supporting Micro Lending Regulations of 2012.
Section 49(2) of the NBFIRA Act lists the Micro-lenders as regulated entities together with other non-bank financial institutions (NBFIs).
Micro-Lending Regulations require micro-lenders to be licensed and further prescribes the market conduct of these entities. (e.g. loan agreements, display of information, advertising, penalty interest for arrears etc.)
Is a micro lender or cash loan allowed to keep my ATM Card/Omang card?
Answer: NO!!! Regulation 14 governs the loan repayment and collection methods. This regulation is clear and categorical that micro-lenders should not obtain customer’s bank cards, national ID cards or any other official document not even bankcard PIN numbers for collection of loan installments. Such an act by a micro lender is a violation of the law.
*It is a violation for any micro lender or cash loan to:
- require the disclosure of the borrower’s personal identification number (PIN) used for a bankcard: or
- take possession of a borrower’s bankcard, national identity card or any other official document.
This also feeds into the Ministry of Labour and Home Affairs publicized unlawful act of confiscating of another person’s National Identity Card (Omang). The public is informed that this act is unlawful and a person found to conduct such dispossession is liable to a fine not exceeding P500.00 or to imprisonment for a term not exceeding six (6) months or both. (National Registration Act, CAP. 01:02, Section 18 & 19).
Report any micro lender or cash loan that insists on retaining your ATM Card / Omang Card to the following numbers: 3102595/3686100 Fax: 3102376/3102353 or at info@nbfira.org.bw.
