1. GENERAL PROVISIONS
The General Conditions of Business Activities of the ‘MI-BOSPO’ Tuzla Microcredit Foundation (hereinafter General Conditions) ensure the protection of the rights and interests of the credit users, the co-debtors and the guarantors.
The General Conditions contain standard conditions of the ‘MI-BOSPO’ Tuzla Microcredit Foundation’s (hereinafter MI-BOSPO) business activities which are applied to credit users, co-debtors and guarantors, the conditions for establishing the relationship and communication between credit users, co-debtors and guarantors and MI-BOSPO, as well as the conditions for conducting transactions in the credit approval affairs.
MI-BOSPO is obliged to apply the General Conditions while conducting its activities and fulfilling responsibilities from the scope of its business and to act with professional care in its relationship with credit users, co-debtors and guarantors.
The business relationship between MI-BOSPO and credit users is based on the principles of mutual trust, safety of investments and mutual benefit which results from the business cooperation in which MI-BOSPO’s responsibility is to act in accordance with legal regulations, rules of profession and professional ethics.
MI-BOSPO is obliged to publish the General Provisions as well as their changes and amendments, and make them available to credit users, co-debtors and guarantors, not later than 15 days upon the beginning of their application.
MI-BOSPO ensures the protection of the rights and interests of credit users, co-debtors and guarantors by the adoption and the consistent application of the General Conditions and other internal regulations, which must be aligned with the legal regulations and based on good business practices and fair relationship with credit users, co-debtors and guarantors. All this is achieved by applying the following principles:
1. Conscientiousness and integrity
2. Acting with a good professional’s care in fulfilling responsibilities
3. Equality in a relationship between the credit users, the co-debtors, the guarantors and MI-BOSPO
4. Protection from discrimination
5. Transparent business activities and provision of information
6. Contracting specific and definable responsibilities
7. The right of the credit users, the co-debtors and the guarantors to file objections
MI-BOSPO is obliged to apply the principles from this item in all phases of establishing and maintaining the relationships with the credit users, the co-debtors and the guarantors (advertising, negotiation phase and delivery of draft contract, conclusion of contract, use of services and duration of the contractual relationship).
1.3. Credit user
Credit user is an individual who uses or has used the MI-BOSPO’s services, or an individual who addresses MI-BOSPO with the interest of using those services and who is identified as such by MI-BOSPO.
Credit user in MI-BOSPO is an individual who:
− generates income from her/his own business activity, or
- generates income by working for someone else, or
- is unemployed and has an intention to start her/his own business.
Credit user in MI-BOSPO is a person who generates income from her/his own business activity. This can be a small or large scale business activity, which has lasted for at least three months before the client applies for credit, and which is not, by law or any other general regulation, evaluated as unacceptable.
Credit user is also a person who does not generate income from her/his own business activity, but lives in the household with a person who does have her/his own business or her/his household members are employed in the country or abroad.
Credit user is supposed to:
- be in possession of a BiH ID card,
- be in possession of a ‘CIPS’ (Citizens’ Identity Protection System) registration document
- is of age, but not older then 70
Co-debtor is a person who is responsible for the payment of all MI-BOSPO’s receivables just as the credit user is.
If a co-debtor is used as one of the credit assurance instruments, MI-BOSPO will use all instruments of enforced collection towards the co-debtor, just as towards the credit user, including ban after landing.
Guarantor is a person who represents a guarantee of the credit affair and who commits, in written form exclusively, to repay the debt to MI-BOSPO only when collection is not possible by the use of all available credit assurance instruments. Guarantor can be demanded to fulfill this obligation only after the principal debtor (credit user and co-debtor if there is one) fails to fulfill it, within the timeframe established by the contract, and MI-BOSPO has exhausted all manners of enforced collection from the principal debtor (and co-debtor if there is one).
The inclusion of a guarantor is not allowed in the FBiH in the following cases:
a. when collateral is the instrument of credit assurance
b. when credit maturity period is longer than 36 months
1.4. Credit product
MI BOSPO can grant a credit to one user in the amount of up to KM 10, 000.
The maximum maturity period for the credit repayment is 60 months.
MI-BOSPO offers the following groups of products:
1. Business loans: credits for starting, maintaining and enhancing clients’ business activities.
2. Housing loans: credits for renovating, expanding or purchasing housing units;
3. Multipurpose loans: credits aimed at improving clients’ living conditions
MI-BOSPO does not finance:
1. Businesses which accumulate profit from prohibited activities;
2. Businesses which deal with any sort of discriminatory activity;
3. Businesses which endanger human natural habitat and environment in any way;
4. Businesses which, significantly undermine the interests of the employees as well as their health and safety at work;
5. Business activities which involve child labor or have elements of forced labor;
6. Businesses which undermine the cultural heritage and monuments in any way;
7. Businesses which have to do with forced resettlement.
1.5. Environment protection
MI-BOSPO promotes and applies the principle of environment protection:
− Because it wishes the wellbeing for the local and wider communities.
− Because it is socially responsible.
− Because it educates and encourages clients and everybody else to also be socially responsible.
1.6. Interest rates, fees and expenses
MI-BOSPO calculates and presents effective interest rates on approved credits.
Effective interest rate is a decursive interest rate which is calculated at an annual level by applying the complex interest calculation in which the discounted cash earnings are equalized with the discounted cash expenses related to the approved credits.
An effective interest rate is agreed upon openly and transparently. All conditions under which the credit is approved are presented to the credit user.
MI-BOSPO determines the interest rate for each credit product separately by the Decision on credit products.
The interest rate for all the credit products is constant (fixed interest rate).
MI-BOSPO does not charge fees for the credit processing or any other fees, except for the costs incurred, during the credit processing, by the use of services of other institutions (pledge registry, credit bureau, banks and similar).
1.7. Payment currency
Credits are contracted with a currency clause and are processed using convertible marks (KM), by applying the average currency rate of the Central Bank of BiH in relation to the EUR, on the day when the credit is utilized and placed at the user’s disposal. The credit is repaid in convertible marks, by applying the average currency rate of the Central Bank of BiH in relation to the EUR, on the day when the credit is repaid, on the day when the user fulfills her/his financial obligations, if it is not contracted otherwise.
2. PROVIDING INFORMATION IN THE PRE-CONTRACT PHASE
2.1 While advertising our services and whenever an advertisement refers to an interest rate or contains some other reference information related to the price of service or an income, MI-BOSPO is obliged to clearly and precisely state the following, using a representative example:
1) the type of microcredit;
2) the amount of interest rate and the variability of the annual nominal interest rate;
3) the effective interest rate;
4) the currency in which a microcredit is contracted;
5) the periods a credit is contracted for;
6) the criteria for indexing a microcredit;
7) the total amount of microcredit;
8) all expenses a credit user is liable for.
3. PROVIDING INFORMATION DURING THE NEGOTIATION PHASE
3.1 MI-BOSPO is obliged to provide information to the credit user about the conditions and all the significant characteristics of the service it offers, which is to be the subject of the contract on the microcredit (hereinafter: offer) in the form of a standardized info paper, using a representative example of the service in written or electronic form. The information is to be presented in a way that enables the user to compare offers from various providers of the same services and to evaluate the suitability of the contract to her/his needs and financial situation, but which will not, at any moment, deceive the user.
The information paper needs to contain:
1) the type of service (description/characteristics of financial service offered),
2) the name of the business and the address of the service provider,
3) the amount of service, the currency and the conditions of use,
4) the duration of contract,
5) the amount and variability of nominal interest rate,
6) the effective interest rate and the total amount the user needs to pay, or the amount that needs to be disbursed to her/him,
7) the amount and the number of the credit installments and periods in which they are to be paid (monthly, quarterly etc.),
8) The expenses of the maintenance of one or more accounts for which the payment and withdrawal transactions will be registered unless the opening of such an account was not offered as an option to go together with the expenses of the use of a certain repayment manner including here both the payment and withdrawal transactions and all other recompenses and costs stipulated in the contract and which were described as either fixed or variable, including the conditions under which they can be changed
9) Information about the possible situation when a notary’s services are necessary during the contract conclusion.
10) Information about the obligation of closing a contract on accessory services as an annex to the main contract, especially when the closing of one such contract is necessary due to the obligation on the provision of a service as conditioned in an advertisement.
11) Interest rate that is used in case of a delayed settlement of debts as well as the rules of its adjustments, and other fees that are to be paid in case of unfulfilled commitments,
12) Warning about the consequences in case of a failure to fulfill commitments,
13) When needed, instruments of assuring the fulfillment of commitments,
14) The right of credit user to give up the contract, conditions and ways of giving the contract up, as well as the amount of expenses related to it,
15) The right of the credit user to repay her/his debt early as well as the amount of expenses related to early repayment,
16) The right of the credit user to, during the evaluation of her/his credit capacity, get free information about the results of the data-base checks,
17) The right of the credit user to, at her/his requests, get free copy of the draft contract, except if MI-BOSPO, at the time of submitting the request, evaluates that the conditions for establishing the relationship with the user, in a specific legal affair, are not met.
18) The period during which MI-BOSPO is bound by the data given during the negotiation phase.
19) The conditions of making a deposit in a bank, if that is a pre-condition for getting a credit, as well as possibilities and conditions for closing the credit with a monetary deposit.
All the data and information related to the service MI-BOSPO offers must be written in the same size letters and equally visible in the information paper.
3.2 If MI-BOSPO secures the fulfillment of the credit user’s commitments by a guarantor, MI-BOSPO is obliged to inform the guarantor about the subject of the guarantee, the form of the guarantee, as required by contract (a type of contract unique to the FBiH), the scope of the guarantor’s responsibility she/he is being committed to by giving the guarantee statement. MI-BOSPO is also obliged to present all the information to the guarantor, make all important elements of the contract available to her/him (a type of contract unique to the FBiH) that clearly make her/him aware of her/his rights and responsibilities. Also, upon the guarantor’s request, MI-BOSPO is obliged to provide her/him with a free draft contract (a type of contract unique to the FBiH) and enable her/him to consider it outside of MI-BOSPO’s offices.
3.2.1 For credits with a guarantee in the offices seated in FBiH
MI-BOSPO is obliged to make sure a guarantor is informed about all the facts and conditions related to the contract, in the MI-BOSPO office, not later than 15 days before the contract is concluded, as well as to provide her/him with an appropriate explanation and instruction related to the application of those conditions. At the guarantor’s request, MI-BOSPO is obliged to provide her/him with answers to the questions in a written form.
4. DATA AND PROVISION OF NFORMATION
Before concluding the contract on the credit, MI-BOSPO is obliged to evaluate the borrowing, the credit capacity of the credit user, the guarantor or another person who, personally, assures that the credit user will fulfill her/his commitments.
The evaluation of the credit capacity is performed on the basis of an appropriate information, documents and information received during the credit processing, by looking into credit registries after being given written permission by persons the registry data is related to, as well as by looking into public registries and data bases.
MI-BOSPO is obliged to keep all the data confidential as well as evaluation decisions and judgments reached by working together with the credit user.
The data are protected. Without a clear written permission given by the user, the data can be provided only to the persons in relation to whom there is no legal obligation of data confidentiality and when the legally established pre-conditions are met.
Credit user has the right to, during evaluation of his credit capacity, get free information about the results obtained by the data bases’ checks.
Before concluding the contract on credit and with written approval from the credit user, the guarantor or another person who personally assures the fulfillment of the credit user’s commitments, MI-BOSPO is obliged to provide information and make the documents and data obtained during the process of evaluating their credit capacity available to them.
5. CONTRACT ON CREDIT
Before the contract is concluded, MI-BOSPO is obliged to provide credit user with all information about the service, all important conditions and elements of the contract which clearly make contracted parties aware of their rights and obligations. At the user’s request, MI-BOSPO is obliged to provide her/him with a free draft contract and enable the user to consider it outside of MI-BOSPO offices, for the period of 24 hours.
In case the credit is assured by a guarantor, at the guarantor’s request, MI-BOSPO is obliged to provide her/him with a free draft contract and enable the guarantor to consider it outside of MI-BOSPO offices.
Following the completion of the previous phases, MI-BOSPO will complete the negotiation phase by closing the contract on credit.
While closing the contract on credit, MI-BOSPO is to deliver one sample of the repayment plan, which is an integral part of the contract, to the credit user.
5.1 For the credits with guarantors, in the offices seated in FBiH
Contract on credit is unique and contains all mutual rights and obligations of MI-BOSPO, credit user and guarantors.
Separate contracts between MI-BOSPO and credit user on one side and MI-BOSPO and guarantor on the other side, are not allowed.
Contract is made in written form.
The act of signing the contract must be attended by the guarantors as well.
If the guarantor is illiterate, the fingerprint must be certified by two witnesses or by a competent institution.
Contract on credit cannot contain provisions by which the guarantor gives up her/his rights guaranteed by this policy and by the Law on Protection of Guarantors.
6. BREAKING AND CANCELATION OF CONTRACT
6.1 Disbursement of credit
MI-BOSPO cannot make the funds available to the credit user before the 14 days period after the contract is concluded ends, except at the credit user’s clear request.
6.2 BREAKING OF CONTRACT
Credit user has the right to break the contract on credit without having to state reasons for doing so, within 14 days from the day when the contract is concluded, or within a shorter period of time, if this is specifically agreed to by the contract with the aim of making the credit funds available to the user, at her/his clear request, provided that the user has not started using the credit funds.
Credit user is obliged to inform MI-BOSPO, in written form, about his intention to break the contract. The date when MI-BOSPO receives this written information is considered to be the date of the contract cancellation.
6.2.1 For credits with guarantors in the offices seated in FBiH
Guarantor has the right to break the contract within seven 7 days from the day when the contract was closed, without having to state reasons for doing so.
Guarantor is obliged to inform MI-BOPSO about her/his intention. The date when this information is received is considered to be the date of contract renouncement. This information is delivered in written form.
When the credit user cancels the contract, just as when the credit user repays the credit early, she/he is not obliged to pay any fees.
6.3 Early payment
Credit user can repay her/his credit, in total or partially, before the date scheduled for repayment, and has the right on the decrease of the total expenses in the amount of interest rate on the remaining debt as agreed in the contract on credit.
In case of early credit repayment, MI-BOSPO will not calculate the interest rate for the early repaid debt.
Credit user is obliged to inform MI-BOSPO, in advance, about her/his intention to repay the credit early, while MI-BOSPO is obliged to implement the user’s request within 24 hours from the moment the request is received (one working day).
6.4 Providing information
Credit user has the right to get the written report on the balance of her/his credit, free of charge, at least once a year, during the repayment period, including the information about the repaid principal and interest rates as well as about the amount of remaining debt.
6.4.1 For credits with guarantors in the offices seated in FBiH
MI-BOSPO is obliged to deliver free reports to the, at least twice per year, about the balance of the debt as agreed in the contract.
6.5 Breach of contract
If credit user does not fulfill any of the contracted commitments, or if she/he loses the credit, the borrowing capacity, MI-BOSPO has the right to cancel all contracted relations and make the contracted financial claims immediately due.
7. CREDIT USER’S RESPONSIBILITIES
For the purpose of having a regular and unobstructed business relationship, credit user is to inform MI-BOSPO, without any delay, about all changes of her/his name, address, representation authorization for dealing with MI-BOSPO (persons authorized to represent credit user and the scope of the authorization, especially on the grounds of a proxy).
The content of the user’s information memo provided to MI-BOSPO must be unambiguous. MI-BOSPO is not responsible for the damage that results from the delay in conducting business, if the damage is caused by the need to additionally check insufficiently clear information memo.
Credit user is obliged to:
- enable MI-BOSPO to control the use of funds approved and earmarked for a certain purpose;
- deliver financial reports and other documents to MI-BOSPO, at the request and as chosen by MI-BOSPO, and enable MI-BOSPO to monitor her/his business activities;
- ensure the instruments of securing MI-BOSPO’s claims;
- enable MI-BOSPO to monitor and evaluate the quality of instruments of securing its claims during the entire business relationship.
8. CREDIT USER’S OBJECTIONS
Credit user, guarantor or another person who, personally, guarantees the fulfillment of the user’s commitments have the right to file objections, if they think that MI-BOSPO does not apply legal regulations, general business conditions, good business practice and responsibilities as agreed by the concluded contract.
MI-BOSPO handles all received suggestions, objections and compliments as prescribed by the Law and its internal regulations. The decisions about objections are passed by the MI-BOSPO Complaint Board.
MI-BOSPO is obliged to organize the activities related to dealing with objections, to deliver the response to the person who filed the objection not later than 30 days from the day when the objection was filed.
If MI-BOSPO does not deliver the response within 30 days, or if the person who filed the objection is not satisfied with the response, she/he has the right to file an objection to and inform the Banking Agency about it, in a written form.
9. GOVERNING LAW AND COURT JURISDICTION
The legal framework of FBiH, Republika Srpska and Brcko District of BiH is the governing law for the business relationship between MI-BOSPO and credit users.
In case of a dispute, the court jurisdiction is contracted on the grounds of the MI-BOSPO central office in Tuzla and therefore the court in Tuzla is competent to deal with the dispute.
General conditions of business activities
1. GENERAL PROVISIONS