{"id":37186,"date":"2025-06-06T00:00:13","date_gmt":"2025-06-06T06:00:13","guid":{"rendered":"https:\/\/garciabodan.com\/?p=37186"},"modified":"2025-09-05T09:52:04","modified_gmt":"2025-09-05T15:52:04","slug":"monetary-and-financial-system-law-of-nicaragua-a-new-compass-for-microfinance-institutions","status":"publish","type":"post","link":"https:\/\/garciabodan.com\/en\/monetary-and-financial-system-law-of-nicaragua-a-new-compass-for-microfinance-institutions\/","title":{"rendered":"Monetary and Financial System Law of Nicaragua: a new compass for microfinance institutions"},"content":{"rendered":"

On December 30, 2024, Law No. 1232, the \u201cMonetary and Financial System Administration Law,\u201d was published in La Gaceta, the Official Gazette. This legislation establishes the regulatory framework for the administration of Nicaragua\u2019s monetary and financial system, covering entities such as the Monetary and Financial Governing Council (CDMF), the Central Bank of Nicaragua (BCN), and the Superintendency of Banks and Other Financial Institutions (SIBOIF), as well as the individuals and institutions under their supervision.<\/span>\u00a0<\/span><\/p>\r\n

This new legal framework has raised questions across various sectors, including microfinance. What impact does this law have on Microfinance Institutions (MFIs)? Are they now subject to a new regulatory framework? Broadly speaking, the answer is that there is no structural change to their organizational or functional regulation. However, there are specific monetary obligations that must now be observed.<\/span>\u00a0<\/span><\/p>\r\n

Microfinance activity in Nicaragua continues to be governed solely by Law No. 769, the \u201cLaw for the Promotion and Regulation of Microfinance\u201d. This law stipulates that MFIs are subject to oversight by the National Microfinance Commission (CONAMI) and are not part of the traditional banking system regulated by SIBOIF. Their mission focuses on providing financial and non-financial services to low-income individuals, promoting economic and social inclusion through productive activities.<\/span>\u00a0<\/span><\/p>\r\n

However, while Law No. 1232 does not alter this regulatory framework, it does introduce currency and convertibility provisions that apply generally, including to MFIs. Specifically, Article 106 of the new law states that payments must be settled in c\u00f3rdobas. Nevertheless, Article 107 allows for exceptions, such as transactions originating abroad, foreign currency transactions conducted by authorized MFIs, and other cases defined by the BCN.<\/span>\u00a0<\/span><\/p>\r\n

In December 2024, the Central Bank of Nicaragua issued two circulars clarifying the treatment of foreign currency transactions. These indicate that MFIs may express and charge for their services in U.S. dollars, provided that users are also given the option to pay in c\u00f3rdobas. In other words, flexibility remains, but under clearly defined guidelines.<\/span>\u00a0<\/span><\/p>\r\n

Law No. 1232 does not alter the core regulatory framework for MFIs, but it does impose certain obligations regarding the handling of national and foreign currencies. Microfinance institutions will need to pay close attention to provisions issued by the Central Bank and other monetary authorities, ensuring compliance with regulations without compromising their operations or their mission of financial inclusion.<\/span><\/p>","protected":false},"excerpt":{"rendered":"

On December 30, 2024, Law No. 1232, the \u201cMonetary and…<\/p>\n","protected":false},"author":10,"featured_media":42655,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[231,229],"tags":[],"class_list":["post-37186","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insight","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/37186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/comments?post=37186"}],"version-history":[{"count":2,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/37186\/revisions"}],"predecessor-version":[{"id":42654,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/posts\/37186\/revisions\/42654"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/media\/42655"}],"wp:attachment":[{"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/media?parent=37186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/categories?post=37186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/garciabodan.com\/en\/wp-json\/wp\/v2\/tags?post=37186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}