Code of Conduct to Govern Small Lenders Now with Bank of Jamaica | New
The Consumer Affairs Commission (CAC) says a code of conduct has been drafted to govern the operation of microcredit institutions (MCIs) when the Microcredit Act comes into force in July.
The law, passed in 2021, will provide a licensing and regulatory regime for MCIs that provide loans to individuals and operators in the micro, small and medium-sized business sector.
The CAC was designated in the Microcredit Act as the agency responsible for investigating and handling all consumer complaints against MCIs.
CAC chief executive Dolsie Allen said the draft code of conduct had been submitted for review to the Bank of Jamaica, which has regulatory responsibility for MCIs.
“We await feedback and as soon as we receive it we will contact key stakeholders for feedback,” Allen said in an interview with JIS News, the government information service.
The code of conduct, when finalized, will include the name, occupation and place of residence of the borrower; the affairs of the parties; the date the loan was made and disbursed; the amount of the loan; repayment terms and interest rates.
Allen said the intent of the code of conduct is to minimize conflict.
“We want an agreement; we do not want to impose anything on microcredit institutions. We want it to be a co-operation where both parties … have sat down and put together something that will be accepted by both sets of people,” Allen said, adding that ultimately the ACC has the responsibility. to protect consumers.
Meanwhile, Dr Blossom O’Meally Nelson, co-chair of the Joint Advocacy Committee, representing the microfinance industry, said the development of the code of conduct was welcomed by its members.
According to her, the regulation of the sector aims to raise the visibility of MCIs, thus putting them “on another level”.
The advocacy committee, which represents members of the two formal microlender organizations, the Jamaica Microfinance Association and the Jamaica Microfinance Association, was unhappy with various aspects.
They lamented that suitability and adequacy requirements can be too onerous for businesses.
Until last month, around 20 Jamfin members reportedly applied for microcredit licenses.
Fewer than 100 of the estimated 200 microlenders operating in Jamaica are members of either association. Many operate informally and under the radar, a situation the licensing regime is meant to change.
– JIS News