Microfinance Institutions Network (MFIN), the industry association for microfinance and a RBI-recognised self-regulatory organisation, has released the fourth edition of the Industry Code of Conduct (CoC).

This CoC was released jointly with Small Industries Development Bank of India (SIDBI), the Association of Small Finance Banks of India (ASFBI), Sa-Dhan and the Finance Industry Development Council (FIDC).

Sivasubramanian Ramann, Chairman & Managing Director, SIDBI said, “For us to take microcredit to every unserved household, we need all the regulated entities to unite with the single-minded objective of financial inclusion. The importance of following the principles of customer protection while lending cannot be over-emphasized. 

It is good to see that digital processes have also been covered by the CoC as many processes are digital and microfinance institutions have to play a vital role in spurring entrepreneurship and inclusion “

J P Sharma, CGM-Department of Regulation, RBI, said , “The fourth edition of the CoC is important in the wake of the new RBI microfinance framework. The customer has always been at the core of RBI’s policies and it is especially pertinent for low-income households. Following the CoC in letter and spirit will not only ensure customer protection, but also a disciplined approach to credit disbursement. The CoC will, therefore, be critical in view of the role that microfinance institutions are expected to continue to play in financial inclusion.”

Alok Misra – CEO & Director MFIN said, “RBI’s Harmonised Regulations necessitated a revision of the Industry Code of Conduct for the microfinance industry. The CoC draws on regulation, past editions of code, global best practices such as Universal Standards of Social Performance Management (USSPM), Client Protection Principles (CPP) and a field understanding of SROs. 

The key pillars are: fair treatment, education and transparency, information and privacy, grievance redressal and employee engagement“

The primary focus of the Industry Code of Conduct has been to promote and advance ‘responsible lending’ practices in microfinance. 

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