They should have a small trading and a small derivatives book. And they must not engage in any notable capital market or cross-border activities. And because experience has taught us that there will almost never be a perfect list of criteria that covers every eventuality, the final decision should always rest with the supervisors.
At the same time a plethora of semi formal and informal financial institutions, which include nearly two thousand SACCOs, have grown up. All of these semi-formal and informal financial institutions, which are not subject to any prudential regulation, are collectively referred to as tier IV financial institutions.