28th December 2022, Skopje – Greater protection of citizens, using the services of financial companies and boosting the confidence in financial companies are part of the goals under the amendments to the Law on Financial Companies, which were proposed by the Ministry of Finance and adopted by the Government at the last session.
Amendments to the Law on Financial Companies are aimed at protecting the consumers, users of the services under these companies, thereby setting maximum amount of all costs related to the respective credit, abolishing both the possibility for being extended a credit for the purpose of closing a previously outstanding credit in the same financial company, as well as the possibility for companies owning a permit or license, as per the Law on Games of Chance and Entertainment Games, to act as credit intermediaries of a financial company, i.e. offer credit products.
The proposed amendments stipulate that the financial company cannot conclude a consumer loan agreement if the costs not included in the annual total costs rate exceed 60% of the amount of the approved loan. Fees refer to all costs the consumer pays or is obliged to pay during the entire validity period of the agreement, arising from. or which are, in any way, related to the consumer credit agreement or related services. Costs incurred in the enforcement procedure and the statutory default interest are exceptions therefrom. Financial company will, in a transparent and public manner, be obliged to publish the tariff list with the fees on its website or highlight it in a visible place in its working premises.
Under the new proposed law, financial companies will have to establish a credit risk management system, pertaining to the loss of the financial company due to the inability of the client to settle his/her liabilities in terms of the agreed amount or the terms and conditions thereof.
The Law also provides for strengthening the supervision over the operations of financial companies, following the example of other regulatory bodies (such as the National Bank and the Securities and Exchange Commission), for which a special rulebook will be prescribed and adopted. Fines in the amount of EUR 8,000 to EUR 10,000 are foreseen for non-compliance with the legal provisions.
In addition, amendments are geared towards strengthening the regulatory framework for the operations of the financial companies on the market in the Republic of North Macedonia, all to the end of financial companies acting as stable financial institutions that offer an alternative to the banking operations, rather than just companies offering short-term credits to the population.
More significant changes aimed thereat, are increasing the amount of the founding capital for establishment for the financial company from EUR 100,000 to EUR 500,000, which cannot be provided from loans or credits, with at least two employees therein, with the manager being an employee of the financial company with a good reputation. The legal amendments stipulate that the license will be revoked from the financial company if two measures are imposed thereon within one year, i.e. a fine or a temporary ban on performing an activity.
The legal amendments also additionally regulate the financial activity – factoring.
Amendments to the Law resulted from the need to strengthen the regulatory requirements and standards the financial companies have to meet, the number of which has increased significantly, with the number of users of the extended consumer loans increasing as well.