FINANCIAL COOPERATIVES

CHAPTER 46:10
FINANCIAL COOPERATIVES

ARRANGEMENT OF SECTIONS

    SECTION

PART I
PRELIMINARY

    1.    Short title

    2.    Interpretation

    3.    Application

PART II
LICENSING OF REGISTERED SACCOS

    4.    Prohibition against operating business without licence

    5.    Application for licence

    6.    Criteria for licensing

    7.    Issue of licence

    8.    Conditions of licence

    9.    Prohibition against transfer or assignment of licence

    10.    Expiry of licence

    11.    Suspension or revocation of licence

    12.    Revocation of licence not relief from obligations

    13.    Protection of name

PART III
CONDUCT OF BUSINESS IN CERTIFIED PREMISES

    14.    Premises certificates

    15.    Business to be conducted in certified premises

PART IV
REGISTER OF LICENSED SACCOS

    16.    Register

    17.    Publication of licensed SACCOs

    18.    Evidence of Register

PART V
PERMISSIBLE ACTIVITIES OF SACCOS

    19.    Permissible services for primary SACCOs

    20.    Permissible services for secondary SACCOs

PART VI
GOVERNANCE OF SACCOS

    21.    Directors’ terms of office, meetings, responsibilities

    22.    Duties of management

    23.    No employee director in licensed SACCOs

    24.    Disclosure of fees, expenses, paid to director

    25.    Internal control systems

PART VII
REGULATION AND SUPERVISION OF SACCOS

    26.    Capital requirements

    27.    Minimum liquid assets

    28.    Additional directives for SACCOs

    29.    Other permissible investment of funds

    30.    Insider lending

    31.    Charge against shares and savings deposit

    32.    Treatment of dormant accounts

    33.    Limits on loans and credit facilities

    34.    Ownership shares

    35.    Conduct of business

    36.    Disclosure of cost of borrowing

    37.    Exhibition of financial and other information

    38.    Actions requiring approval

    39.    Amendment of by-laws

PART VIII
ACCOUNTS AND AUDIT

    40.    Financial year

    41.    Accounts

    42.    Disclosure requirements

    43.    Supervisory committee

    44.    Duties of external auditor

    45.    Qualification of external auditor

    46.    Rectification of audited accounts

    47.    Accounting records and retention

    48.    Publication and sharing of information

PART IX
REMEDIAL MEASURES AND WINDING-UP OF SACCOS

    49.    Remedial measures

    50.    Winding-up

PART X
DEPOSIT GUARANTEE FUND

    51.    Establishment of Deposit Guarantee Fund

    52.    Appointment of Board of Trustees

    53.    Composition of Board of Trustees

    54.    Powers and functions of Board of Trustees

    55.    Remuneration of Board of Trustees

    56.    Sources of Deposit Guarantee Fund

    57.    Protection of deposits

    58.    Contribution to Deposit Guarantee Fund

    59.    Deposit Guarantee Fund annual report

PART XI
MISCELLANEOUS PROVISIONS

    60.    Default by officers

    61.    Falsification of books, and other prohibited acts

    62.    Employer or agent to deduct and remit

    63.    Fee or commission for effecting deductions

    64.    Voluntary mergers

    65.    Confidentiality

    66.    Money laundering transactions

    67.    Obstruction of the Registrar and other acts

    68.    General offences and penalties

    69.    Regulations

    70.    Directives and guidelines

    71.    Voluntary membership withdrawal from SACCO

PART XII
TRANSITIONAL PROVISIONS

    72.    Transitional provisions

    73.    Compliance by existing SACCOs

8 of 2011
G.N. 5/2012

An Act to provide for the regulation and supervision of financial savings and credit cooperative societies and to make provision for matters connected therewith or incidental thereto

PART I
PRELIMINARY

1.    Short title

    This Act may be cited as the Financial Cooperatives Act.

2.    Interpretation

    (1) In this Act, unless the context otherwise requires—

    “Appeals Committee” means the Financial Services Appeals Committee established under the Financial Services Act;

    “bank” has the meaning ascribed to it in the Banking Act;

    “body corporate” means a company or corporation incorporated under or by virtue of the laws of Malawi or of any other state, but does not include a corporation sole;

    “borrower” means a person who has concluded a loan agreement with a SACCO;

    “capital” includes unimpaired reserves, retained earnings, donations to a SACCO and permanent and non-withdrawable shares;

    “compulsory or collateral savings” means a sum of money which is paid to a SACCO as—

    (a)    security;

    (b)    partial guarantee of a loan; or

    (c)    a precondition for a loan granted or promised to be granted at a future date to a member making the payment;

    “cooperative society” means an entity registered under the Cooperative Societies Act;

    “credit facility” means—

    (a)    the granting by a SACCO of an advance, loan or other facility which enables a member of the SACCO, or another person at the request of the member, to access funds or financial guarantees; or

    (b)    the incurring of an obligation by a SACCO on behalf of a member at the direction of the member;

    “deposit” means money entrusted to a SACCO and accepted by it for credit to a depositor’s account, without putting up any security for the deposit;

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