The Bank of Albania rejects the request of MCA and FINAL and leaves the revocation of the license in effect

The Bank of Albania has rejected the administrative complaint made by "MICRO CREDIT ALBANIA" and FINAL for the removal of their license. In the decision, the bank specified its arguments for both subjects.

According to the decision published in the Official Bulletin of the Bank of Albania, the latter initially suspended the license of "MICRO CREDIT ALBANIA" in 2022 for one year and postponed this suspension for another 6 months until mid-June of this year.

While in May, after the Bank of Albania became aware of the fact that the personal security measure "house arrest" was imposed on the partner Elda Ibro, of the non-banking financial entity "MICRO CREDIT ALBANIA" shpk, by the Court of First Instance of the Jurisdiction of General Tirana, revoked the subject's license on the 23rd.

After this decision, MCA submitted the appeal, claiming that the Bank of Albania did not respect the conditions and requirements, the procedures provided for by the legal framework in relation to the relevant decision-making, which in any case was disproportionate; The partner of the company Mrs. Elda Ibro has no administrative powers at MCA shpk and obstacles, legal prohibition, negative effects are easily avoidable (without having a negative impact on society, with the transfer of the quota she owns in MCA shpk).

The subject has claimed that since the beginning of the activity of the company MCA shpk, distinguishing between the civil legislation and the criminal legislation, until today, no judicial decision has resulted in charging MCA shpk with the obligation to return the monetary amounts that have been seized in a way illegal, irregular, more than what is foreseen by the contractual obligations, or the relevant court decisions.

While the Bank of Albania in its arguments, among other things, claims that in relation to the MCA's claim that the measure of personal insurance against the partner of the company does not affect the continuity of the entity's activity, the reputation of the company due to the preventive measure taken against the partner is seriously damaged.

According to the bank, the activity of the non-bank financial entity "MICRO CREDIT ALBANIA" shpk has been suspended until 31.12.2023, for a period of 12 months. During this period, the entity was ordered to take measures to fully address all deficiencies and recommendations identified in the examination report. It turned out to the Bank of Albania that none of the tasks left were addressed by the subject "MICRO CREDIT ALBANIA" shpk.

According to the bank's arguments, with Decision no. 644 dated 06.02.2024 of the Governor, for repeated and unaddressed violations by the subject, in an escalating manner, the Bank of Albania decided to limit the exercise of all activities for which the subject was licensed, except for the sale of the loan portfolio that this subject administered.

This license suspension measure extended its effects until 30.06.2024. This follows the strategy of exercising the activity by the subject "MICRO CREDIT ALBANIA" shpk, reflected in the decision-making of the sole partner of the company dated 5.01.2024, according to which the company will sell the entire loan portfolio that it administered.

Both of the above decisions on the suspension of activity have not been appealed to the court by the entity "MICRO CREDIT ALBANIA" shpk, thus admitting that the decision-making of the Bank of Albania was fair and in accordance with the nature and degree of violations found.

As it turned out, the subject never took measures to eliminate the violations. Not only that, but it turned out that the subject does not have and has not engaged the necessary structures for the elimination of these violations, as confirmed by the conclusions of the full examination report, submitted with letter no. 799/3 dated 25.01.2024. Even in the electronic message dated 20.04.2024, of the MCA employee, through which the attitude of the sole partner of the company, Mrs. Elda Ibro, the Bank of Albania is requested to allow the delivery of the license by MCA, and the release from office of the administrator Mr. Andis Gjoka.

The strategy of continuity of the entity's activity for the sale of all loans to 4 entities, as stated by the entity itself, has been unfulfilled", the Bank's arguments state.

The governor of the Bank of Albania has concluded that the decision-making of the Bank of Albania to revoke the license of this subject is appropriate and is fully supported by the regulatory acts.

Even for FINAL, the Bank of Albania has left the revocation of the license in effect. The bank argues that one of the important criteria for granting or refusing a license is provided for in Article 10 of the licensing regulation and is related to the reputation of the founder (shareholder) of the company. Moreover, "The decision of the Bank of Albania to revoke the license of the entity FINAL sh.pk and the fact that the investigation against the sole partner of the company is related to the activity of this entity, is also supported by the progress of the procedural actions taken by the prosecution body .

With the letter no. 12828 prot, dated 29.05.2024, we were informed by the Prosecutor's Office of the General Jurisdiction of the Judicial District of Tirana, about the registration of criminal proceedings for the criminal offense "Cleaning the products of criminal offense or criminal activity" for suspected criminal offenses during the financial activity of the company "FINAL" shpk as well as ordered the blocking of the bank accounts, among others, of this company, its sole partner Arben Meskuti, and the persons related to them".

The governor of the Bank of Albania has concluded that the decision-making of the Bank of Albania to revoke the license of this entity is appropriate and is fully supported by the regulatory acts.

Infamous debt collectors

At the beginning of May, the Prosecutor's Office of Tirana officially announced the opening of the proceedings for the criminal offense "Fraud and pyramid scheme" provided by article 143/a, second paragraph of the Criminal Code, as part of the criminal report no. 3464, dated 25.02.2020 , of the Ministry of Justice to the entities Micro Credit Albania, ADCA, SHP Zig, FS, FLASH as well as their executors.

According to the Prosecutor's Office of Tirana, from the acts administered, it results that these companies bought from "ProCredit Bank Albania" 3999 loans considered bad and unpaid over the years, with a total amount of 7,299,203 euros and used a coercive loan scheme, where, through theft, debtors who had old debts in banks were forced to take out loans even though they had no possibility of repayment, and their salaries, properties, or cars were blocked by enforcement agencies.

For the liquidation of these loans purchased by MCA, it is suspected that theft was used, forcing the creditors to obtain new loans from this financial institution, to unlock the old one, which was again available as a portfolio of the MCA financial agency.

By obtaining a new loan from the MCA financial agency, the assets and accounts of the creditors were temporarily unblocked, but later the MCA financial agency appeared with the request for the liquidation of other amounts.

This scheme has been used on various borrowers, who turn out to be victims of the theft of their property, causing a very high economic damage to these citizens or private and public entities.

According to the prosecution, these loans were granted under conditions of fraud, because MCA was aware of the financial impossibility of liquidation on the part of the debtors and usually, they were registered in the register of problem creditors, which is kept by the Bank of Albania.

In the prosecution's interpretation, the theft was committed in good faith, deceiving the borrowers that by taking a loan from MCA to liquidate the previous loan, they would have relief in the payment of installments. This fact later did not turn out to be such, but it made the financial situation of the debtors even more difficult.

According to the Prosecutor's Office, these financial institutions also applied a late interest of 2% + 8%, but this was done illegally for cases that belonged to a period before the determination of this rate by law.

The application of the legal interest of 2% + 8% is foreseen in the amendments to the Code of Civil Procedure, which were made in 2016. Specifically, according to the amendments approved in that year, "when the executive title, for which the execution order is issued, is act for granting bank credit or monetary obligations, the Court must provide legal interest in accordance with the legislation in force that regulates late payments in contractual and commercial obligations".

The provision of "legal interest 2% + 8%" finds reference in law no. 48/2014 "On delayed payments in contractual and commercial obligations" and this is done by the Court and not by the executor, since the assessment and amount defined in the executive title is determined only by the court.

From the investigative documents, it is proven that "legal interest 2% + 8%" was used in a massive form in all the documents of these bailiffs, and in all cases they are related to execution orders, i.e. court decisions that were issued before the entry pursuant to law no. 48/2014 "On delayed payments in contractual and commercial obligations".

The execution orders under investigation and for which this interest was used, in the vast majority of them, were issued in the period 2005-2015.

Also, in the investigative acts administered, concrete cases of the phenomenon of the imposition of conservative sequestrations on immovable assets that have been extended and against persons who have nothing to do with the execution of court decisions have been recorded.