Microfinance Bill, 2012 H.B. 2, 2012 16 Requirements for loan agreements (1) Every loan agreement to which a microfinancier is a party shall⎯ (a) be in writing, setting out clearly all its material terms and conditions; and (b) permit the borrower to make partial or total pre-payments of any amounts owed by him or her under the contract; and (c) specify any penalties for prepayments of amounts owed by the borrower under the contract; and (d) contain such terms and conditions as may be prescribed. (2) Any provision of a loan agreement which purports to allow the microfinancier unilaterally to alter the rate of interest payable by the borrower, the repayment period, or any other obligation of the borrower, shall be void. (3) If a microfinancier makes a loan or advances credit under a loan agreement which does not comply with subsection (1) or (2) no interest or other charge or fee whatsoever in connection with the loan or credit shall be payable on the loan or advance. 17 Microfinanciers code of conduct Every microfinancier shall comply with the code of conduct set out in the First Schedule. PART V CONDUCT OF CORPORATE MICROFINANCE BUSINESS 18 Application of Part V In addition to complying with Part IV, corporate microfinanciers must comply with this Part. 19 Conduct of microfinance and other business by corporate microfinanciers Subject to this Act, every corporate microfinancier shall conduct its microfinance business and other operations in accordance with sound administrative and accounting practices and procedures, adhering to proper risk-management policies, and shall comply with the terms and conditions of its registration and with any directions given to it by the Reserve Bank or the Registrar in terms of this Act. 20 Board of corporate microfinancier (1) The operations of every corporate microfinancier (other than a partnership) shall be directed by a board consisting of at least⎯ (a) three directors, in the case of a corporate microfinance institution (other than a partnership) engaged exclusively in credit-only microfinance business; or (b) five directors, in the case of a microfinance institution that is engaged in deposittaking microfinance business; who shall be responsible for formulating policies relating to the microfinancier’s microfinance business and supervising the conduct of that business. (2) No person shall exercise any of the functions of a director of a corporate microfinancier following his or her appointment or re-appointment as a director, unless the - 15 -