New Delhi (November 22, 2010)– The Smart Campaign, a global initiative to incorporate strong client protection principles across the microfinance industry, today announced a partnership with the Small Industries Development Bank of India (SIDBI) to help institutionalize client protection best practices throughout the Indian microfinance industry.
Over the past five years, the Indian microfinance industry has experienced exponential growth, increased competition and growing pressures on microfinance organizations (MFIs) for commercial returns. While industry groups have taken action recently to reduce client overindebtedness, improve transparency in loan terms and ensure that all MFI clients are treated with respect, the continued influx of capital and strong demand for MFI services require further resources to ensure that strong consumer protection standards are established.
In collaboration with SIDBI and its network of 108 MFIs, including the largest MFIs serving the majority of microfinance clients in India, the Smart Campaign will implement training and tools that institutionalize best practices in client protection. These practices are based on six core Client Protection Principles: 1.Preventing Over-indebtedness 2. Transparency and Responsible Pricing 3. Appropriate Collection Practices 4. Ethical Staff Behavior 5. Complaints Handling and Resolution 6. Privacy of Client Data.
The Smart Campaign will work with SIDBI partners by conducting training workshops and Client Protection Assessments based on a comprehensive questionnaire that examines incentives, governance and field practices affecting every aspect of interaction with clients. The project will work to embed the Client Protection Principles in the practices of partner MFIs in a way that will be solid and lasting, ensuring that clients receive high quality financial products that are delivered in a transparent, respectful and prudent manner.
About the Smart Campaign
The Smart Campaign is a global campaign consisting of microfinance leaders from around the world who believe that protecting clients is not only the right thing to do, but the smart thing to do. By providing microfinance institutions with the tools and resources they need to deliver transparent, respectful, and prudent financial services to all clients, The Smart Campaign is helping the industry achieve its two goals of helping clients and attaining long-term financial success, as well as making microfinance a model of responsible banking around the world. The Campaign is head quartered at the Center of Financial Inclusion (CFI) and is governed by a cross industry steering committee.
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Dr Hema Bansal
Smart Campaign (India Manager)
Fax: 91-80 41120009
+1 617-625-7080 x1245