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Based on the Central Monetary and Payments Law No. (9) of 2021 AD, especially Articles (6), (39), (40), (41), (42), (43), (44), (45), (46), (62)

And the minutes of the meeting of the Board of Directors of the Central Monetary and Payments Office No. (4) dated 5/11/2024 AD

Co-chairmanship of the Central Monetary and Payments Office

It was decided that:

Instructions for periodic reports for microfinance institutions

 

No. (3) for the year 2024

 

Article ( 1 )

Definitions

The words and phrases mentioned in these instructions shall have the meanings assigned to them below The context did not require any other meaning:

Enterprise: microfinance institution licensed by the Central Monetary and Payments Office .
Monthly reports It includes four reports: the active loan and financing portfolio , the sectoral distribution of the loan/financing portfolio , the portfolio by loan size , and the classified portfolio distribution report .
Quarterly reports: It includes five reports: the financial position statement, the income statement and their clarifications, the distressed portfolio and detailed allocations , details of the outstanding loan portfolio and financing , and the investments report.

 

Article ( 2 )

Objective and scope of application

  1. These instructions are intended to regulate Monthly and quarterly periodic reports (every three months) that microfinance institutions must provide to the Central Cash and Payments Office on a regular basis, and provide the necessary instructions for institutions to prepare these reports.
  2. The provisions of these instructions apply to all microfinance institutions licensed by the Central Monetary and Payments Office.

 

Article (3)

Monthly and quarterly reports

  1. The institution must prepare monthly and quarterly reports in accordance with Appendix No. (1) and Appendix No. (2).
  2. Monthly reports:
  • Portfolio of active loans and financing .
  • Sectoral distribution of the loan/financing portfolio .
  • Portfolio according to loan size .
  • Classified portfolio distribution report .
  • The 10 largest loans and financing .
  1. Quarterly reports:
  • The statement of financial position and its clarifications.
  • The income statement and its explanations.
  • Detailed distressed portfolio and allocations .
  • Details of the portfolio of existing loans and financing .
  • Investments report.
  1. The organization’s role is limited to completing the data according to the specified forms for these reports without making any amendments to the approved monthly and quarterly report file.
  2. The financial and accounting system used in the institution must provide automatic extraction of the required reports from the cash office and any amendments thereto.

 

Article (4)

Liaison officer periodic reports

The institution must adhere to the following:

  1. Assigning an experienced employee to perform the duties of a liaison officer with the Central Cash and Payments Office, so that he is responsible for sending periodic reports on time, correcting observations, answering inquiries, and making amendments related to periodic reports.
  2. Assigning a substitute employee to represent the liaison officer in the event of his absence, and the necessity of providing the cash office with any amendment related to the substitute employee.

Article (5)

Submitting periodic reports

The institution must adhere to the following:

  1. Providing the cash office with monthly reports within a maximum period of the seventh working day at the end of each month, via e-mail ( mfisreports @…………………… ).
  2. Providing the cash office with quarterly reports within a maximum period of the fifteenth business day from the end of each quarter, via email ( mfisreports @…………………… ).
  3. Responding to all observations and inquiries of the Cash Office regarding periodic reports and any amendments thereto within a maximum period of three working days from the date of sending the observations to the institution.

Article (6)

Monthly closing of financial statements

The institution must adhere to the following:

  1. Closing the loan and financing portfolio at the end of the last business day of each month.
  2. Closing the organization’s other accounts and making adjustments no later than the end of the third business day of the month following the financial reporting period.

Article (7)

Instructions for completing the statement of financial position and income statement

  1. The organization must prepare financial statements in accordance with International Financial Reporting Standards ( IFRS ) and International Accounting Standards ( IAS ).
  2. Attached are the explanatory instructions necessary to complete the financial statements, Appendix No. (3). These instructions help the institution prepare the financial statements and clarify the contents of their detailed items.

 

Article ( 8 )

Penalties

Anyone who violates the provisions of these instructions will be punished in accordance with the provisions of the Central Monetary and Payments Law No. (9) of 2021 AD. And the provisions of Instructions (63/Q) dated 1/24/2024 regarding licensing microfinance institutions .

 

Article ( 9 )

Effectiveness and implementation

All competent authorities in the regions of the Autonomous Administration of North and East Syria, each within its jurisdiction, must implement the provisions of these instructions , and their provisions shall apply from the date of their issuance.

Issued on ……….. on …/…./2024 AD.

Co-presidency

Central Cash and Payments Office

 

Appendices

Appendix No. (1 ): Monthly reports: (Excel file sent to the organization)

  • Portfolio of active loans and financing .
  • Sectoral distribution of the loan/financing portfolio .
  • Portfolio according to loan size .
  • Classified portfolio distribution report .
  • The 10 largest loans or financing

Appendix No. ( 2 ) Quarterly reports: (Excel file sent to the organization)

  • The statement of financial position and its clarifications.
  • The income statement and its explanations.
  • Detailed distressed portfolio and allocations .
  • Details of the portfolio of existing loans and financing .
  • Investments report.

 

Appendix No. (3): Guide to completing financial statements

First: Guide to completing the financial position statement:

  Statement of financial position Financial Position Statement  
Company name   Name of institution
the year   Year
the month   Month
the date   Date
Reference number
Ref
Assets Amount in USD

1.1 Cash 0
1.1.1 In the Headquarters – In the Headquarter  
1.1.2 In Branches​  
1.2 Balances at the cash office Due to the CMPO 0
1.2.1 Current Accounts​​  
1.2.2 Others​​  
1.3 Balances with banks Due to Banks 0
1.3.1 At banks inside NES – ( Note No. 1- Supporting Schedule) Due to Banks inside NES  
1.3.2 At banks outside the NES – ( Note No. 2 – Supporting Schedule) Due to Banks outside the NES  
1.4 Net Loan Portfolio 0
1.4.1 Total portfolio of loans and financing – Gross Loan Portfolio  
1.4.2 Provision for impairment of loans and financing – Provisions for Loans Impairment  
1.5 Net Investment Portfolio 0
1.5.1 Local Investments​  
1.5.2 Foreign Investments​  
1.5.3 Provision for Impairment of Investments – Provisions for Investments Impairment  
1.6 Grants Receivables 0
1.6.1 Owned by local donors Receivables  
1.6.2 Due to external donors – Foreign Receivables  
1.7 Net Properties and Fixed Assets Net Properties and Fixed Assets 0
1.7.1 Real estate used for the organization’s activities ( Note 3)
3 Real Estate used for the Institution’s activities-Supporting Schedule
 
1.7.2 Furniture and Fixtures ( Note No. 4 – Supporting Schedule) Furniture and Fixtures  
1.7.3 Intangible Assets ( Note No. 5 – Supporting Schedule) Intangible Assets  
1.7.4 Depreciation and amortization Amortization  
1.8 Other Assets ( Note No. 6 – Supporting Schedule ) Other Assets  
1.9 Total Assets 0
     
2 Owners ‘ Equity and Liabilities Amount in USD

2.1 Owners Equity 0
2.1.1 – up Capital  
2.1.2 Reserves​​ 0
2.1.2.1 Risk Reserve​  
2.1.2.2 Other Reserves​  
2.1.4 Profit and loss for the current year – Profit/Loss for Current Year  
2.1.5 Retained profits and losses Earnings  
2.2 Total Liabilities 0
2.2.1 Short-Term Debts ( Note No. 7- Supporting Schedule)  
2.2.2 Unearned Revenue​  
2.2.3 Long-Term Debts ( Note No. 8- Supporting Schedule) Long-Term Debts  
2.2.4 Grants offered to the Institution ( Note No. 9 – Supporting Schedule) Donations offered to the Institution  
2.2.5 Other obligations ( Note No. 10 – Supporting Schedule) Other Liabilities  
2.3 Total Owners ‘ Equity and Liabilities 0

1: Origins – Assets
1.1 Cash : Both banknotes and coins of local currencies And foreign and precious metals found in the institution’s vaults at its headquarters and its branches
1.2 Balances at the cash office – Due to the CMPO : Banknotes and coins of local and foreign currencies held at the cash office.

1.3​ Balances with banks – Due to Banks : This includes cash deposits in banks , microfinance institutions , and other institutions , inside and outside self-administration areas . The balances must be positive cash balances (i.e. not overdrawn accounts) .

1.3.1 At banks inside the NES (Note No. 1- Supporting Schedule ) Due to Banks inside the NES : Cash deposits in banks , microfinance institutions , and other institutions within the self-administration areas, details must be included in the note attached to the statement of financial position (note No. 1).

1.3.2 At banks outside the NES (Note No. 2 – Supporting Schedule ) Due to Banks outside the NES : Cash deposits in banks , microfinance institutions , and other institutions outside the Autonomous Administration areas, details must be included in the note attached to the statement of financial position (Note Number 2).

1.4 Net Loan Portfolio – Net Loan Portfolio : It includes the net value of loans and financing granted by the institution after excluding the value of the provisions made against the classified portfolio ( provision for impairment of loans and financing ).

1.4.1 Gross Loan Portfolio : List here the total value of loans and financing granted, including the value of the allowance for impairment of loans and financing .

1.4.2 Provision for impairment of loans and financing – Provisions for Loans Impairment : Include the accumulated value The provision for impairment of loans and financing is made against the portfolio of loans and financing classified in accordance with the instructions issued by the Monetary Office .

1.5 Net Investment Portfolio : It includes the value of net local and foreign investments of all permitted types in accordance with the instructions issued by the Monetary Office, after excluding the value of the allowance for impairment of investments .
1.5.1 Local Investments : Includes the total value of local investments, including the value of their impairment allowance .

1.5.2 Foreign Investments : Includes the total value of foreign investments, including the value of their impairment allowance .

1.5.3 Provision for Impairment of Investments – Provisions for Investments Impairment : It includes the value of the provision calculated for the decline in the value of local and foreign investments in accordance with the instructions issued by the Monetary Office .

1.6 Grants Receivables : Includes Amounts due but not received from grants provided to the Foundation, whether these grants are restricted or unrestricted .

1.6.1: Due to Local Receivables

1.6.2: Due to external donors – Foreign Receivables

1.7 Net Properties and Fixed Assets : It includes the net value of property and fixed assets after excluding the value of depreciation and amortization .

1.7.1 Real Estate used for the Institution’s activities (Note 3) Real Estate used for the Institution’s activities-Supporting Schedule : It includes the net value of the real estate used to carry out the Institution’s activities, including headquarters and branches, after excluding the value of their depreciations. Its total value must not exceed 20% of the organization’s equity. Details must be included in the note attached to the statement of financial position (Note No. 3).

1.7.2 Furniture and equipment (Note No. 4 – Supporting Schedule ) Furniture and Fixtures : Includes the net value of the organization’s office furniture and equipment after excluding the value of its depreciations. Details must be included in the note attached to the statement of financial position (Note No. 4).

1.7.3 Intangible assets (Note No. 5 – Supporting Schedule ) Intangible Assets : includes the net value of intangible assets , including the automated systems used for the organization’s activities and the value of goodwill, if any, after excluding the value of their amortizations . Details must be included in the note attached to the statement of financial position (Note No. 5).

1.7.4 Depreciation and Amortization : It includes the accumulated value of depreciation and amortization .

1.8 Other Assets (Note No. 6 – Supporting Schedule ) Other Assets : It includes the value of other assets not mentioned in the previous items, such as expenses paid in advance, interest and unaccepted accrued returns, stationery inventory, and establishment expenses . Details must be included in the note attached to the statement of financial position (Note No. 6).

1.9 Total Assets : The value of this item must equal the sum of the values of the main items of assets (1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8) from the financial central statement. The value of item (2.3) must also equal the total equity and liabilities from the financial position statement.

2: Owners’ Equity and Liabilities

2.1 Total Owners ‘ Equity : It includes the total value of the items (2.1.1 , 2.1.2 , 2.1.3 , 2.1.4 , 2.15) in the financial position statement .

2.1.1 Paid-up Capital : represents the value of the institution’s paid-up capital, which must not be less than the minimum capital specified in the instructions issued by the cash office .

2.1.2 Reserves : It includes the total cumulative value of the risk reserve and other reserves that the institution creates . This item must equal the sum of the two items (2.1.2.1 and 2.1.2.2) of the financial central statement .

2.1.2.1 Risk Reserve : It represents the cumulative value of the risk reserve, which is formed as a percentage of (1%) of the portfolio of regular loans and financing in accordance with the instructions issued by the Monetary Office .

2.1.2.2 Other Reserves : It represents the value of the reserves that the institution forms, either based on other legislation applicable to companies, or optional reserves that the institution forms by deducting a certain percentage of the net profits generated annually before distributing them to shareholders, with the aim of strengthening ownership rights. Enterprise . It also includes a revaluation reserve , which is a specific reserve account established to record changes in the value of assets, such as land and buildings, as a result of revaluation. It does not constitute The positive revaluation reserve (profits) is part of the institution’s net equity ( the institution’s regulatory capital ), but if it is negative (losses), it is included in the calculation of the institution’s equity . The institution must attach an explanatory table of other reserves (Clause 2.1.2.2).

2.1.4a Profit /Loss for the Current Year : Includes the value of the organization’s net income for the current fiscal year after taxes and grants and after deducting reserves. Before making any distributions to shareholders . This item must equal the value of net income after taxes and grants ( Item No. 26) of the income statement .

2.1.5 Retained profits and losses – Retained Earnings : They represent the accumulated profits that the institution retains from its surplus profits .

2.2 Total Liabilities

2.2.1 Short-Term Debts (Note No. 7 – Supporting Schedule ) Short-Term Debts : represents the value of loans obtained by the institution from banks or other financial institutions – after obtaining the approval of the Monetary Office – and which are due within a period of less than one year from the date of borrowing. . The institution must include the details in the note attached to the statement of financial position (Note No. 7), including the name of the lender , date of grant , value , and repayment period .

2.2.2 Unearned Revenue : It represents the value of revenues from interest, returns, commissions/fees received in advance before their due date.

2.2.3 Long-Term Debts (Note No. 8 – Supporting Schedule ) Long-Term Debts : represents the value of loans obtained by the institution from banks or other financial institutions – after obtaining the approval of the cash office – and which are due within a period of less than more than one year from the date of Borrowing. The institution must include the details in the note attached to the statement of financial position (Note No. 8), including the name of the lender , date of grant , value , and repayment period .

Note: The total of short-term and long-term debts must not exceed 100% of the institution’s equity and outstanding debts, and may amount to three times the institution’s equity and outstanding debts, provided that prior written approval is obtained from the cash office. In all cases, these debts must be used to finance the institution’s main activities in granting loans and financing to its clients.

2.2.4 Grants offered to the Institution (Note No. 9 – Supporting Schedule ) Donations offered to the Institution : includes the value of grants and donations provided to the Institution by external local and foreign parties, provided that the terms of these grants, gifts and assistance are consistent with the objectives of the microfinance institution, and that they are used In carrying out the organization’s activities in providing microfinance loans to targeted segments. The institution must include the details in the note attached to the statement of financial position (Note No. 9).

2.2.5 Other obligations (Note No. 10 – Supporting Schedule ) Other Liabilites : Includes other obligations other than the items mentioned above, such as the end-of-service allocation for the institution’s employees, the tax allocation , expenses owed by the institution and not paid, interest and returns received in advance, and any other obligations. The institution must include the details in the note attached to the statement of financial position (Note No. 10).

2.3 Total Owners’ Equity and Liabilities : It represents the total of ownership rights and liabilities and must equal the sum of items (2.1) and (2.2) of the institution’s financial position statement .

Second: Guide to completing the income statement

  Income statement Income Statement  
Company name   Name of institution
the year   Year
the month   Month
the date   Date
Reference number
Ref
Account Name Account Name Amount in USD

13 Total Operating Revenues 0
13.1 Loans Portfolio Revenues 0
13.1.1 Interest & Returns on Loan Portfolio  
13.1.2 Loan Portfolio Fees & Commissions – Fees & Commissions on Loan Portfolio  
13.2 Other operating revenues 0
13.2.1 received on bank accounts  
13.2.2 Revenue on investments – Revenue on investments  
 13.2.3 Other ( Note 1)- Other (Supporting Schedule 1 )  
14 Total Financial Expenses 0
14.1 Interest & Fees Expense on Borrowing 0
14.1.1 Interest paid on borrowing Paid on Borrowing  
14.1.2 Borrowing fees and commissions – Fees & Commissions on Borrowing  
14.2 Other Financial Expenses 0
14.2.1 Banking fees and commissions – Banking Fees  
14.2.2 Other ( Note 2)- Other (Supporting Schedule 2 )  
15 Net Financial Income 0
16 Operating expenses 0
16.1 Personnel expenses ( Note 3) – Personnel Expenses (Supporting Schedule 3)  
16.2 Administrative expenses​ Expenses 0
16.2.1 Depreciation and amortization expense for assets ( Note 4) –
Assets Depreciation and Amortization Expense (Supporting Schedule 4)
 
16.2.2 Other administrative expenses ( Note 5) – Other Administrative Expenses (Supporting Schedule 5)  
17 Loans and financing allocations 0
17.1 Provision for impairment of loans and financing expense – Impairment Losses on Loans  
17.2 Value of recovered loans  
18 Net Operating Income 0
19 Non-operating revenues ( Note 6) – Non-Operating Revenues (Supporting Schedule 6)  
20 Non-Operating Expenses ( Supporting Schedule 7 )  
21 Net Income before Taxes 0
22 Taxes  
23 Net Income after Taxes & Before Donations 0
24 Net Returns of Donations 0
24.1 Donations Revenues​  
24.2 Donations Expenses​  
25 Net Income after Taxes & Donations 0

 

13: Total Operating Revenues : represents the total revenue generated from the organization’s basic activity. It must equal the sum of items (13.1: Loan and financing portfolio revenues) and (13.2: Other operating revenues ) of the income statement.

13.1: Loans Portfolio Revenues : Income generated from interest, returns, fees, and commissions received from loans and financing granted to clients . The sum of the two items must be equal to (13.1.1: Interests and returns on the loan and financing portfolio) and (13.1.2: Fees and commissions on the loan and financing portfolio).

13.2: Other Operating Revenues : These are revenues derived from interest or returns on the institution’s balances with banks, from investments, or other operating revenues. It must equal the sum of items (13.2.1), (13.2.2) and (13.2.3) of the income statement.

13.2.1: Interest or returns received on bank accounts : Interest income or returns generated from the institution’s deposits and accounts with banks and other financial institutions.

13.2.2: Revenue on investments : Interest income received from investments in securities (stocks and bonds) in accordance with instructions issued by the Monetary Office.

13.2.3: Other Revenues : Any other revenues, and the organization must include the details in the explanation of these revenues in the income statement.

14 : Total Financial Expenses : Financial expenses represent interest, commissions and fees incurred by the institution to provide its operational activity. They must equal the sum of items (14.1) and (14.2) of the income statement.

14.1: Interest & Fees Expense on Borrowing : These are the interest and commissions paid by the institution on the loans it obtains from banks or other financial institutions. It must equal the sum of items (14.1.1) and (14.1.2) of the income statement.

14.1.1: Interest paid on borrowing – Interest Paid on Borrowing : represents the interest paid by the institution on the loans it obtains from banks or other financial institutions .

14.1.2: Fees & Commissions on Borrowing : These represent the fees and commissions paid by the institution on the loans it obtains from banks or other financial institutions, including legal expenses, evaluation expenses, and other expenses related to borrowing.

14.2: Other Financial Expenses : These include expenses and commissions paid for banking or financial services obtained by the institution other than the expenses specified in the previous items. It must equal the sum of the two items (14.2.1) and (14.2.2).

14.2.1: Banking Fees and Commissions : These are the expenses, fees and commissions incurred by the institution in exchange for the banking or financial services it obtains from banks or other financial institutions.

14.2.2: Other : Any other financial expenses not specified in the previous items. The institution must include the details of this item in the clarification designated for it in the income statement.

15: Net Financial Income : It represents the net income resulting from total operating income (item 13) minus total financial expenses (item 14).

16: Operating Expenses : They represent the expenses incurred by the organization in order to generate operating income. They must equal the sum of items (16.1), (16.2) and (17) of the income statement.

16.1: Personnel Expenses : Expenses related to employees’ wages and benefits.

16.2: Administrative Expenses : These include the administrative expenses necessary to operate the institution. They must equal the sum of items (16.2.1) and (16.2.2) of the income statement.

16.2.1: Depreciation and amortization expense for assets – Assets Depreciation and Amortization Expense : It represents depreciation expenses for tangible assets (real estate, devices, equipment, furniture, decorations, etc.), and amortization expenses for intangible assets such as (establishment expenses, automated systems, and goodwill) in accordance with policies The accounting applied in the organization is consistent with the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS) .

16.2.2: Other Administrative Expenses : These represent the expenses necessary to operate the institution, such as rents , fees and licenses, legal and professional fees, and other expenses mentioned in Note (5) of the income statement.

17: Provisions for loans and financing – Impairment Losses on Loans : Represents the net expense of provisions against loans and financing, calculated in accordance with instructions issued by the Monetary Office, minus recoveries from troubled loans and financing. It must equal net item (17.1) minus item (17.2) of the income statement.

17.1: Provision expense for impairment of loans and financing – Impairment Losses on Loans : The value of the provision expense calculated against the loans and financing granted by the institution and calculated in accordance with the instructions issued by the cash office.

17.2: Value of Recovered Loans : Represents the value of recoveries from troubled loans and financing.

18: Net Operating Income : Net financial income equals item (15) minus operating expenses, item (16) of the income statement.

19: Non -Operating Revenues : They represent income resulting from sources other than those specified above. The organization must include the details in Note No. (6) of the income statement.

20: Non -Operating Expenses : These represent expenses other than the expenses specified above. The organization must include the details in Note No. (7) of the income statement.

21: Net Income before Donation Returns – Net Income before Donation Returns : represents the organization’s net income before the income resulting from grants provided to the organization. It must equal net operating income (Item-18) plus non-operating revenues (Item-19) minus non-operating expenses (Item-20) from the income statement.

22 : Net Returns of Donations : represents the value of revenues generated from grants (item 22.1) minus grant expenses (item 22.2) from the income statement.

22.1  Donations Revenues : Represents revenues generated from interest and commissions received from loans and financing granted through grants provided to the institution.

22.2 : Donations Expenses : These represent the expenses incurred by the Foundation on loans and financing granted through grants provided to the Foundation.

23: Net Income before Tax : It represents the organization’s net income before taxes. It must equal net income before grant proceeds (item 21) plus net grant proceeds (item 22) of the income statement.

24: Taxes : The value of taxes is the tax paid or payable on profits resulting from operations and other revenues in accordance with the legislation in force in the areas of the Autonomous Administration of North and East Syria.

25: Net Income after Taxes : It represents the net income generated by the institution for the financial period, and it must equal the net income before taxes (Item – 23) minus the value of taxes (Item 24) of the income statement.

 

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