Financial Crime World

Syria Takes a Leap in Financial Compliance: New Microfinance Decree Paves Way for Social Financial Institutions

Date: February 1, 2007

Syria’s Commitment to Financial Development

In a groundbreaking action to strengthen its financial sector and broaden financial services access, the Syrian Arab Republic issued the new General Microfinance Decree on February 1, 2007.

This legislation marks an essential step towards encouraging both domestic and international investors to establish Social Financial Banking Institutions in Syria.

Key Provisions of the Decree

The new decree, consisting of 15 articles, outlines the following conditions and requirements for these institutions:

  • Financial Services: Social Financial Banking Institutions will be granted authorization to accept deposits, provide microcredit, and offer other financial services.
  • Minimum Capital Requirement: Institutions must meet the minimum capital requirement.
  • Compliance with International Standards: Institutions must adhere to international standards for capital adequacy.
  • Foreign Shareholder Provisions: Institutions must comply with provisions related to foreign shareholders.
  • Branching and Offices: Institutions can set up branches and offices for broader reach and networking.

Institutional Status and Foreign Currency Transactions

Article 2 of the decree extends the status of these institutions to include all provisions governing their activities and operations. Additionally, institutions authorized for foreign currency transactions can conduct such business through licensed commercial banks.

Positive Impacts on the Syrian Financial Sector

An official from the Central Bank of Syria stated, “This new decree reflects Syria’s commitment to financial compliance and development. Social Financial Banking Institutions will play a crucial role in increasing financial inclusion and promoting economic growth in the country.”

Expectations for the Institutions

These Social Financial Banking Institutions are anticipated to bring about a significant change in the Syrian financial sector. By facilitating financial services for individuals and small businesses, these institutions aim to uphold international banking standards.

  • Financial Inclusion: Increase access to financial services for underbanked individuals and businesses.
  • Economic Growth: Promote entrepreneurship and small business development.
  • Compliance with International Standards: Ensure financial transparency and accountability.