Source: Central Bank of the Russian Federation in English
19 October 2020
Microfinance companies (MFCs) and large consumer credit cooperatives (CCCs) comprising at least 3,000 unit holders will be obliged to regularly disclose the results of their business and financial performance and other data important for consumers on their websites. The respective draft ordinances have been devised by the Bank of Russia.
Specifically, MFCs and CCCs will disclose their procedures for raising funds and disbursing loans, as well as information on their operations that may impact a consumer’s decision to place funds with an MFC or CCC. In addition, MFCs and CCCs shall publish their contacts on their websites, including addresses, telephone numbers, and their executives’ names, and must specify the supervision agency for consumers to send their complaints should any problems arise. In turn, consumers should be aware of the possibility to apply to the financial ombudsman.
MFCs and CCCs will be obliged to provide information about the Bank of Russia’s instructions if the latter fully or partially limit the issue of loans to consumers or the raising of funds from them. CCCs shall also provide notifications of the general meetings of their unit holders.
As a result, microfinance companies’ operations will become easier-to-understand and more transparent, including to those planning to place their savings with an MFC or join a CCC. As to current unit holders, this information will enable them to be more extensively engaged in the management of a cooperative and prevent a potential abuse of power if a particular CCC has dishonest executives.
The draft ordinances also stipulate the procedure for disclosing the above information on MFCs’ and CCCs’ websites and the time periods for its update.
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