Moneylenders to get
same training as bankers

Central Bank circular regulating

further ‘Comptoirs de crédit’

The Central Bank (BDL) has issued a new regulation requiring certain executives in moneylending businesses to have qualifications similar to those required by people holding comparable jobs in banks and financial institutions. The prerequisites pertain to academic, technical, and ethical qualifications in specific regulated positions.

The moneylending businesses, identified by BDL as ‘specialized lending entities’, are known locally as ‘comptoirs de crédit’. They provide small loans against real collateral to people who are unable to borrow from banks. The specialized lending entities were not in the past as strictly regulated by BDL.

The ruling, delivered through intermediate circular 470, is one of a series of decisions made by BDL to fully regulate the specialized lending entities. In January 2016, the Central Bank issued a circular that set their minimum capital at LL2 billion ($1.33 million) and also restricted their lending activities.

The new circular was addressed to banks, financial institutions, and financial intermediation institutions, as well as collective investment schemes in securities and other financial instruments, securitization mutual funds, and specialized lending entities. It amends basic circular 103 issued in 2006.

According to the new decision, employees occupying specific positions have to sit for professional examinations at the ESA Business School. Each year 20 percent of these employees should submit to these exams until the entire number complete these tests.

Employees at ‘Comptoirs de crédit’ will have to submit to exams in some fields only, such as financial regulations and combating financial crime and money laundering.

Moneylenders who are not part of BDL’s list of specialized lending entities are not allowed to operate. The current list includes only 16 companies, much less than before when the Central Bank started imposing restrictions on this sector.

The new ruling has also extended the time limits given to employees to obtain the required professional certificates.

Sami Fakhoury, owner and General Manager of Tamweel Capital Co., a ‘Comptoir de crédit’, said that their company can abide by educational requirements as their employees already hold university degrees. He said that ‘Comptoirs de crédit’ are considering setting up an association to lobby for their interests.