Client Protection

To ensure responsible lending in an evolving industry, within the broad framework provided by the RBI Master Directions for NBFC-MFIs, RBI Fair Practices Code, Industry Code of Conduct (CoC), SRO has framed rules, standards and benchmarks for MFIN member NBFC MFIs. Adherence to Industry CoC and MFIN Standards is mandatory for the membership of MFIN, ensuring client protection.

While the Code of Conduct has been in place since years and is revised periodically, it was in 2019 that MFIN, jointly with Sa-Dhan & FIDC, released the Code of Responsible Lending (CRL). Applicable to all providers in the microcredit space, by adopting the CRL, lenders have committed themselves to universally accepted principles of customer protection.

CRL is guided and overseen by a Steering Committee representing various peer groups as well as the Self-regulatory Organization (SROs), MFIN and Sa-Dhan. The Steering Committee is Chaired by Dr. Harun R Khan (Former Deputy Governor, RBI). The adherence to CRL norms by Providers is checked through a Quarterly Adherence Report (QAR) based on independent data from a Credit Bureau. Based on the performance by the Provider on QAR, the Provider is certified as a ‘Responsible Lender’ by the Steering Committee along with an adherence score.

Industry Standards

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