meta_id 3379997

The Banking Agency of Republika Srpska (the Agency) has enacted a comprehensive Law on Microcredit Organizations establishing the regulatory framework for the establishment, operation, and supervision of microcredit associations and microcredit foundations in Republika Srpska. The law defines microcredit organizations as non-depositary financial institutions whose core activity is microcredit lending, with maximum lending limits of KM 50,000 for microcredit associations and KM 10,000 for microcredit foundations per beneficiary. Microcredit organizations must obtain an operating license from the Agency and register with the court registry of business associations or citizens' associations within 30 days of license issuance. The Agency issues licenses for an unlimited period and maintains registries of all microcredit organizations with headquarters in Republika Srpska and organizational parts of entities from the Federation of Bosnia and Herzegovina and Brcko District. Microcredit associations must maintain minimum capital of KM 500,000, while microcredit foundations require minimum founder contributions of KM 50,000 in cash. The law prohibits microcredit organizations from accepting deposits and restricts their activities to microcredit lending and ancillary services including credit consultations and business counseling. Organizations must disclose effective interest rates and publish audited financial statements annually. The Agency exercises supervisory authority and may withdraw licenses for violations including failure to commence operations within four months of registration, breach of capital requirements, or unauthorized activities. Amendments adopted in November 2011 and July 2026 expanded permissible activities to include insurance procurement, electronic money issuance, and payment services provision for microcredit associations meeting additional capital and organizational requirements. The law establishes criminal penalties for unauthorized microcredit activity and misdemeanor fines ranging from KM 1,500 to KM 15,000 for various regulatory violations. Existing microcredit organizations were required to harmonize operations with the law within one year of its effectiveness.