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  • Chapter Three: Management and Supervision

    • Article Five

      SAMA specifies what a microfinance company shall comply with in terms of information technology, corporate governance, internal organization, outsourcing, risk management, compliance and internal audit based on the nature and the size of the Microfinance Company’s activity and the type of operations.

    • Article Six

      SAMA specifies the provisions that shall be set by Microfinance companies to cover potential losses and risks.

    • Article Seven

      SAMA specifies what a microfinance companies shall comply with regarding the requirements of anti-financial crimes, specifically money laundering, financing terrorism and Counter-Fraud, in a manner that is consistent with the potential risks in these companies.

    • Article Eight

      The Microfinance Company shall establish internal controls and procedures that ensure compliance with these rules and all relevant laws, regulations and instructions, and when contracting with third parties, the Microfinance Company shall ensure the compliance of all third parties with the provisions of these Rules or any related laws and regulations.

    • Article Nine

      The Microfinance Company shall maintain adequate records to prove its compliance with these Rules and all relevant laws, regulations, instructions and take the required measures to prevent any violations of its provisions.

    • Article Ten

      The Board of Directors of the microfinance company forms an audit committee, and it may also form specialized committees to expand the scope of work in the areas requiring special expertise, and shall grant those committees the necessary powers to perform their work and monitor their performance.

    • Article Eleven

      The Microfinance Company shall set written policies, rules and procedures for finance in line with its activity nature, and ensure their implementation, including, as minimum, the following:

      a Rules and conditions for granting Finance and its procedures.
      b Standards and procedures for assessing the economic feasibility of the activity or the production assets to be financed and the borrower’s ability to repay.
      c Procedures to ensure the usage of the finance amount for the purpose specified in the contract.
      d Procedures for monitoring finance performance, and providing advice and guidance to the borrower according to the case.
      e Procedures and controls for collection due installments as well as procedures for dealing with cases of default.
      f Measures of calculation finance cost.

    • Article Twelve

      A Microfinance Company shall establish a code of conduct, approved by the Board of Directors and provide SAMA with a copy of it. This code shall include principles, policies and clear controls for business ethics to deal with the beneficiaries, especially on Credit granting and installment collection practices. The Microfinance Company should take what is needed to ensure the compliance with its code of conduct in line with the relevant Rules, Regulations and Instructions.