Activities of organisations (other than banks and NCFIs) granting unsecured loans on a regular basis is substantially restricted. During recent years the National Bank has repeatedly expressed its intention to regulate these activities because interest rates under loans often exceeded 700% p.a.
Now only pawnshops and several types of non-commercial legal entities (consumer co-operatives and funds) are allowed to provide microloans on a regular basis. Microloans are loans in an amount up to 15,000 basic units (about EUR 150,000) on the day of the agreement. A legal entity should be included in the National Bank register in order to perform such activity. Granting of loans is deemed regular if performed more often than twice a month.
Pawnshops can grant loans to individuals only if secured by pledge of movable property designated for personal, family or household use. Pawnshops are prohibited from engaging in any other activity.
Furthermore, limitations on attracting funds from individuals other than individual entrepreneurs are introduced in order to combat so-called financial pyramids.
As a general rule, legal entities and individual entrepreneurs can attract funds (irrespective of the amount) from individuals not more often than twice a month.
Additionally, pawnshops and funds registered as microfinancial organisations can attract funds without limitation from individuals who are owners of property, or founders or members of such organisations. Consumer co-operatives registered as microfinancial organisations can attract funds from their founding members without limitation and from other members if criteria established by the National Bank are met.
The new rules were established by the Edict of the President ofv the Republic of Belarus of 30 June 2014 No. 325 on Attracting and Granting Loans, Activities of Microfinancial Organisations.