ISLAMABAD: In order to improve governance and risk management, the Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to Non-Banking Microfinance Companies (NBMFCs) and Notified Entities Regulations, 2008.
The proposed amendments, which focus on self-discipline amongst market players and enhance consumer protection of non-banking microfinance companies, have been made available on the SECP website to solicit public comments.
It is pertinent to mention here that the sector has 26 operating NBMFCs with over three million active borrowers and a gross loan portfolio of Rs72 billion.
During the Covid-19 pandemic, SECP enabled NBMFCs to operate smoothly and provide relief to their respective microfinance clients by enabling the Pakistan Microfinance Investment Company Limited, an apex lender of the microfinance sector, to provide more subordinated debt to NBMFCs for strengthening their equity base.
The pandemic, however, demonstrated that the resource base of many NBMFCs needed to be better managed to sustain such adverse situations therefore, the SECP has proposed amendments addressing longer-term values for business continuity and sustainability such as governance, liquidity, risk management and credit underwriting.Â
