Transformation of Microfinance NGOs declared unconstitutional
Based on the request from Kosovar Civil Society Foundation (KCSF), FOL Movement, Kosovo Democratic Institute (KDI) and supported by other 55 NGOs, and sent to Constitutional Court through the institution of the Ombudsman, the Constitutional Court of Republic of Kosovo issued the decision by which the provisions of the Law on Banks, Microfinance Institutions and Non-Bank Financial Institutions, that enabled the transformation of microfinance NGOs into joint stock companies, are found to be unconstitutional.
Law on Banks, Microfinance Institutions and Non-Bank Financial Institutions, which was adopted by the Assembly of Kosovo on 12th of April 2012, enabled the transformation of microfinance NGOs into joint stock companies, and the transformation of NGOs capital in private equity.
The initiative for transformation of microfinance NGOs into private companies was present in Kosovo since almost a decade and civil society organizations constantly opposed it.
While other draft-laws and regulations aiming to allow the transformations were successfully prevented at earlier stages, the Law on Banks, Microfinance Institutions and Non-Bank Financial Institutions was the only one to be adopted even by the Assembly of Kosovo.
The whole process of adoption of the Law was consistently opposed by civil society, while numerous legal and procedural problems have been noted throughout the process. Following an intensive advocacy and public campaign in opposing the transformation, and after exhaustion of all legal remedies, a number of NGOs used the institution of the Ombudsman to file a request for evaluation of the constitutionality of specific articles of this Law. With this decision, the Constitutional Court banned the violation of one of the most important principles of the non-for-profit sector and supported the cause of civil society in Kosovo in preventing transfer of NGO assets to private sector.
For details of the process and the decision of the Constitutional Court, please download the full text of the decision in the following link: http://www.gjk-ks.org/repository/docs/KO97_12_AGJ_ANG.pdf