MPs Table Bill to Allow MDIs Offer Islamic Banking and Agent Banking Services
The Microfinance Deposit-Taking Institutions (Amendment) Bill, 2022, has been tabled to Parliament for First Reading by Hon. Haruna Kasolo Kyeyune, Minister of State for Finance, Planning, and Economic Development (Microfinance).
This occurred on Tuesday, November 22, 2022, at the plenary session presided over by Speaker Anita Among.
The bill states that among other things, Islamic banking, agent banking, and bank assurance services shall be provided through Microfinance Deposit-Taking Institutions (MDIs), also known as microfinance banks.
Currently, the existing MDIs provide fewer services than commercial banks, such as the underwriting and placement of securities, the provision of checks, the handling of foreign exchange, and the conduct of business through computer networks or electronic commerce.
Another addition to the bill would lift the legal restrictions on MDI’s access to the Credit Reference Bureau.
The bill claims that credit reference bureaus let financial firms share credit information. Lenders and other credit providers participate in this process by submitting and exchanging data about borrowers and their repayment practices.
The reports issued by this bureau aid lenders in making wise lending choices.
With these changes, MDIs will also have access to this data for more efficient and effective operations. They will also enable the microfinance sector to advance and be integrated with other financial laws.