We were familiar with the simplified liquidation of assets instituted by the OHADA Uniform Act on the organization of collective procedures for the clearance of liabilities of September 21, 2015. We will now have to get used to the simplified liquidation procedure for microfinance institutions.
Indeed, since April 1, 2018, COBAC EMF Regulation 2018/01 of January 16, 2018, relating to the liquidation of small first-category microfinance institutions have entered into force. These are first-category MFIs whose total deposits are less than 1 billion CFA francs at the time of license withdrawal.
As a reminder, Regulation R-01/17/CEMAC/UMAC/COBAC of September 27, 2017, relating to the conditions for the exercise and control of microfinance activity in CEMAC, which itself incorporates Article 1 of the Regulation of April 13, 2002, relating to the conditions of exercise and control of the activity of microfinance in the CEMAC, defines the establishments of microfinance as approved entities which, not having the statute of bank or financial establishment, practice, with usual title, credit operations and/or collection of savings and offer specific financial services for the benefit of populations evolving for the most part on the margins of the traditional banking circuit.
As for the first category MFIs, are MFIs which proceed to the collection of the savings of their members which they employ in credit operations, exclusively for their benefit. They are not required to have a minimum share capital. They are subject, in addition to the rules common to all EMFs, to certain specific measures such as the obligation to form a network.
The CEMAC Regulation of April 25, 2014, relating to the treatment of credit institutions in difficulty had laid down the principle of subjecting first-category EMFs as well as all categories of MFIs to the same regime as credit institutions, with the exception of the rule’s incompatible with their social form. This submission in the principle of MFIs, whatever their category, to the same rules as credit institutions, could not go without difficulties given the undeniable specificity of MFIs.
The new COBAC Regulation of January 16, 2018, which itself comes after the Regulation of September 27, 2017, MFIs relating to the conditions of exercise and control of the microfinance activity which brought important modifications to the rules applicable to the MFIs, thus comes to take, somewhat into account,
This Regulation, while specifying that small-category MFIs remain subject to the provisions of the 2014 Regulation, provides exemptions to this common law regime to take into account their specificity.
The simplified liquidation procedure for small 1st category MFIs has the following particularities:
Like all liquidation procedures, it can only be opened after the withdrawal of approval pronounced by the COBAC. However, when this withdrawal of approval follows the request of the EMF, derogatory rules are provided for. Thus, the liquidator is chosen from a list proposed by the apex body of the network (unless there is disagreement in which case he is appointed by COBAC) and his remuneration is also proposed by the apex body which collaborates in the liquidation procedure.
The duration of the liquidation is 18 months maximum, it is understood that the duration of the mandate of the liquidator is 6 months renewable (it is deduced from the duration of the liquidation that the renewal cannot intervene more than twice).
The liquidator’s mandate may be terminated at any time; the latter can even be dismissed if he does not accomplish his mission within the allotted time if he is guilty of professional misconduct, or if he is incompetent, incapable or negligent.
The powers and functions of the liquidator are specified: he is responsible for publishing the withdrawal of approval and the liquidation, the opening of the production of claims, the amicable or forced recovery of claims, the exercise of all procedures, the reimbursement of savers – who benefit from a privilege about all creditors, the convening of the general meeting of members and meetings of creditors, the development of the timetable for the liquidation which must communicate to the COBAC as well as the budget.
The remuneration of the liquidator and in general the liquidation costs may, in the event of insufficient cash flow of the EMF, be borne by the National Credit Council or by the other EMFs within the framework of the Professional Association of Institutions microfinance. In other words, the solidarity of other MFIs and even national solidarity is called upon to carry out the liquidation procedure.
The simplified liquidation procedure ends with the preparation of a final simplified liquidation statement, certified by the auditor, approved by the extraordinary general meeting of members and submitted to the general secretariat of COBAC.
After closure of the liquidation and filing of the accounts with the registry of the competent court, the EMF is deregistered and the notice of closure is published.
It was time to take into account the specificity of first category MFIs whose status seemed incompatible with the cumbersome liquidation procedure applicable to credit institutions. Indeed, the limitation of the simplified liquidation procedure according to the amount of the deposits can be considered as discriminatory but something had to be done and the Community authorities have chosen to give preference, for the moment, to small MFIs. The managers of these MFIs should see it as a way of initiating the liquidation of those who are in an irremediable situation as soon as possible so that, if they are not rectified, we can ensure their liquidation as soon as possible and that the creditors, especially savers, have foreign exchange to be paid.
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