Lending rules: Timor-Leste
What the published rules require for unsecured consumer loans in Timor-Leste, in the order a loan is made, and how TS LMS handles each step.
Last reviewed 22 October 2026 · Email me when these rules change
Lender type covered Other Deposit-Taking Institution (ODTI), including microfinance institutions, licensed by the Central Bank of Timor-Leste
- 01
What licence do you need to lend in Timor-Leste?
ODTI licence (Public Instruction No. 06/2010)
What the rules require
Public Instruction No. 06/2010 on the Licensing and Supervision of Other Deposit-Taking Institutions applies to any person or company, including microfinance institutions, holding more than USD 500,000 in client guarantee accounts (art. 2(1)); no organisation may accept deposits or accumulate client guarantee accounts above USD 500,000 without authorisation (art. 3(1)). Licensed ODTIs may, among other activities, accept savings and term deposits and provide financial services with or without collateral (art. 4(1)), with exposure to one person or connected group capped at 1% of regulatory capital (art. 20). Directors and employees must place the interests of the institution and its clients above their own financial interests (art. 29(3)).
Effective 29 December 2010 · Rules as of 29 December 2010 · Source: Instrução Pública n.º 06/2010 sobre o Licenciamento e Supervisão de Outras Instituições Recetoras de Depósitos (Jornal da República, Série I, N.º 49)
How TS LMS handles it
Products, credit rules and limits are set up for each lender and country. Changes to credit policy and to products need a second person's approval, and every change is kept in the audit log.
- 02
How are loan fees regulated in Timor-Leste?
Disclosure of credit terms; no charge for information
What the rules require
Each ODTI must regularly inform clients of the terms and conditions of deposits and credits according to standards set by the Banking and Payments Authority (ABP, predecessor of the Central Bank of Timor-Leste), and display the main terms and conditions visibly at its premises in the languages usually used by its clients (art. 27(1)–(2)). ODTIs may not charge fees for providing this information (art. 27(3)).
Effective 29 December 2010 · Rules as of 29 December 2010 · Source: Instrução Pública n.º 06/2010 sobre o Licenciamento e Supervisão de Outras Instituições Recetoras de Depósitos (Jornal da República, Série I, N.º 49)
How TS LMS handles it
Every charge on a product counts towards the rate check, each product carries a ceiling on the total cost of credit, and staff cannot set a charge above the product's.
- 03
Can loan contracts be signed electronically in Timor-Leste?
Credit documentation; Electronic Commerce and Signatures Decree-Law
What the rules require
How TS LMS handles it
Where loans are signed electronically, the agreement is stored unchanged and signed only after approval, and the signature record keeps who signed, when, the agreement's fingerprint and the device. Money is released by a second staff member who is not the approver, and not if the payout account differs from the one approved.
- 04
What identity checks and anti-money laundering duties apply in Timor-Leste?
Law No. 17/2011 and BCTL Instruction No. 05/2017
What the rules require
How TS LMS handles it
ID document and face checks, and sanctions and PEP screening, are built in. A sanctions match blocks approval and release until compliance clears it with a second officer's confirmation, and a PEP match needs a written enhanced due-diligence note before staff approval.
This page summarises published rules for general information; it is not legal advice. Rules change: check the current text with the authority before acting.