Smart Campaign> Posted by Center Staff

Big news from the Smart Campaign camp. Today, the Campaign, the global movement you’ve come to know for embedding a set of client protection principles into the fabric of the microfinance industry, is announcing enhancements to its Client Protection Certification Program designed to improve and accelerate the certification process.

The Smart Campaign’s Client Protection Certification Program contains a core set of standards against which institutions are evaluated by independent, third-party raters. Certification publicly recognizes those institutions providing financial services to low-income people whose standards of care uphold the seven Client Protection Principles. The certification process aids institutions in strengthening their practices, and becoming certified helps institutions demonstrate to industry stakeholders – including clients, investors, and other institutions – their commitment to responsibly serving their clients. The Client Protection Principles cover important areas such as transparency, fair and respectful treatment, privacy, and prevention of over-indebtedness.

The Certification changes will enable the program to better meet the growing global demand for certification among microfinance institutions, while ensuring that certified institutions demonstrate high standards and the program maintains strong governance and quality control. Several enhancements will take place immediately:

  • Streamlined Certification Process. To reduce the time to Certification, institutions that pass most of the standards (and all the most important standards) will have the option of receiving Certification soon after their missions, with the understanding that they will come into compliance with all standards within a four-month period. If they do not comply fully within the agreed timeframe, the Certification would be withdrawn.
  • Extension of Certification Validity. Originally set at two years, the revisions extend validity to four years, with a check-in after two. At the two-year midpoint, certified institutions must undergo a review in order to retain their certification. The extent of the review will depend on the scope of changes within the financial institution over the previous two years. After four years, a full Certification mission will be required for renewal.
  • Appeals and Complaints System. A complaints system is now available to allow for the resolution of grievances that may arise during the Certification process. It will also serve as a mechanism for general feedback from the public.

In order to make Certification more accessible globally, and to maintain the quality of the Certification process, the Campaign is also developing a new accreditation system that will license both existing and new certifiers. The Campaign expects a number of newly accredited certifiers to be on stream by the end of 2015.

“We have listened carefully to the industry, and we hope these changes will encourage financial institutions to seek Certification,” said Isabelle Barrès, director of the Smart Campaign. “These improvements align with best practices in certifications such as environmental certifications and Fair Trade. Our goal is to make the program as cost-effective, and user-friendly as possible. We want microfinance clients everywhere to work with institutions that meet high consumer protection standards.”

To date, 30 MFIs have been certified as meeting the standards for consumer protection; together they serve more than 15 million clients worldwide,from India to Colombia, Kyrgyzstan, Bosnia, Botswana, Pakistan and beyond.

“We are proud of those institutions that have worked hard to qualify for Certification,” said Elisabeth Rhyne, managing director of the Center for Financial Inclusion. “They are industry leaders and have set a strong example for others to follow.These changes will strengthen the Campaign’s foundation, making the Certification seal a ‘must-have’ for the industry.”

To learn more about Certification, visit the Smart Campaign website, and check out the related blog posts listed below.

Have you read?

Smart Certification: Kashf Foundation Takes the Lead in Pakistan

Consumer Protection in Microfinance Exceeds 15-Million-Client Mark via Smart Certified Institutions

Smart Certification: The View from Azerbaijan