Client Protection in Asia’s Microfinance Industry: Perspectives from Microfinance Associations in Nine Asian Countries
This report summarizes client protection (CP) policies and practices in nine microfinance markets in Asia: India, Pakistan, the Philippines, Myanmar, Cambodia, Bangladesh, Nepal, Sri Lanka, and China. The findings in this report have been gleaned from assessments conducted by the national microfinance associations in these countries from August to November 2014, using the SEEP Client Protection Market Diagnostic Tool. This tool is based on the CGAP methodology used to conduct CP diagnostic exercises in various countries and uses the Smart Campaign’s Client Protection Principles as a reference.
The results offer a multi-country perspective on legal frameworks and industry practice in five areas related to CP in financial services: Price transparency, fair treatment of clients, protection mechanisms for borrowers and depositors, recourse mechanisms, and client data protection. Findings include:
- In six out of the nine markets in which the tool was applied, associations indicate that there are laws or regulations pertaining to some areas of CP practices.
- In a few countries, authorities are keen on enforcement of CP regulations and have created entities and/or partnerships with microfinance associations to educate members and to assist in monitoring in order to improve levels of compliance by financial services providers.
- Most microfinance associations (MFAs) play an important role in self-regulation through the establishment of codes of conduct that take into account Smart Campaign CP principles.
