Client Protection Directives and Guidelines for MFIs in India
This technical note presents the Reserve Bank of India (RBI) directives and the Unified Code of Conduct (UCOC) guidelines within the framework of the Client Protection Principles of the Smart Campaign. It emerges from EDA Rural System's work providing technical assistance for social performance to MFIs in India in the areas of training, mentoring, and assessments, and its association with Sa-Dhan and the Smart Campaign. Guidelines on consumer protection issues in microfinance, both globally and in India tend to overlap and converge around general principles and values. The note highlights this convergence. Guidelines in the note cover topics of appropriate product design and delivery, preventing over-indebtedness, transparency, responsible pricing, fair and respectful treatment of clients, privacy of client data, and mechanism for complaint resolution. They include:
- RBI directives that are mandatory for MFIs in India, and guidelines of the UCOC;
- UCOC guidelines that are required standards for all MFI members of Sa-Dhan and MFIN, including standards that are in the Smart Campaign;
- Additional standards of the Smart Campaign that represent global good practices in client protection, but are not part of UCOC;
- Adequate standards prescribed by the Smart Campaign.
