Bank of Jamaica’s Supervisory Responsibility for Microcredit Institutions
The Microcredit Act (‘the Act’) was passed in January 2021, with the aim of licensing and regulating microcredit institutions (MCIs) that provide financing to individuals as well as, micro, small and medium sized enterprises.
The Act names the Bank of Jamaica as Regulatory Authority, with responsibility for (i) general administration of the Act and (ii) supervision of microcredit institutions. It also names the Consumer Affairs Commission as the body with responsibility for (i) making and issuing a code of conduct for licensees on consumer related matters, and (ii) the investigation of any complaint brought to it by a consumer of a microcredit service.
Bank of Jamaica’s supervisory responsibilities for MCIs are discharged through the Financial Institutions Supervisory Division (FISD) of the Bank. The principal aims of supervision are to minimise the possibility of the sector being used as a conduit for money laundering/terrorism financing and related matters, and to support adherence with the market conduct related provisions of the Act. The supervisory methodology will combine risk-focussed on-site examination of licensees with on-going off-site monitoring.
The Act became effective on July 30, 2021, and makes provision for certain sanctions to be applied in the event of breaches/non-compliance.
