The Smart Campaign is pleased to announce the release of a new tool to be used during the “Compulsory Group Training” portion of many group lending methodologies.

The tool – available for download on the Smart Campaign website – is designed to help microfinance institutions incorporate the Client Protection Principles into their compulsory group trainings (CGT). These trainings are group-level customer education programs MFIs use to interact with and screen prospective clients. CGTs are conducted by institutions practicing village banking methodology, and Grameen-style Joint Liability Group methodology, prior to the client group’s obtaining credit. The trainings are often the first formal interaction between the prospective clients and the MFI.

Now, our creating this tool isn’t to say that MFIs rarely address client protection in their compulsory group trainings. In fact many institutions have unique CGT practices in place to address specific Client Protection Principles. Without comprehensive CGT guidelines available for the industry, however, there is a greater risk of the principles being unevenly applied. Even worse, without guidelines, there’s a risk that some institutions will not place adequate emphasis on any client protection area.

In this new tool we offer a guiding framework for how to conduct CGTs while addressing all relevant aspects of client protection. By the end of all trainings, prospective clients should be well informed on product features, terms and conditions, lending methodology, and their rights and responsibilities. The tool also features examples of group training best practices taken from some of India’s leading MFIs.

The Smart Campaign would like to thank those who helped develop this tool, including the Indian MFIs Ujjivan, Grameen Koota, SKS, Equitas, and Swadhaar. It is through such knowledge sharing that the quality of client protection standards and practices throughout the industry will continue to grow.

To learn more about – and download – the Campaign’s client protection tools, visit the Smart Campaign website. 

Image credit: the Smart Campaign

Have you read?

Eager Investors, Conflicted Teachers, Reluctant Students: The Promises and Pitfalls of Teaching Financial Literacy

The New Client Education Resource Library: Tools for the Microfinance Industry

Implementing Client Protection: Smart Campaign Tools

As an industry, how do we ensure that clients are treated with dignity, even when they fail to meet their contractual commitments?

The Smart Campaign recently tried to crowdsource the answer from its more than 1,700 endorsers.

The Campaign’s fourth “Call for Tools” collected and sifted through MFIs’ best practices as embodied in documents about appropriate collections practices. Swadhaar FinServe Pvt. Ltd. (SFPL) won with their submission “Code of Conduct for Collections and Collections Practices for Group Loans.”

“SFPL won our Call for Tools because their policies and procedures for collections are a good example of how MFIs can provide staff with clear expectations for dignified treatment of clients during collections,” said Smart Campaign Tool Development Specialist Leah Wardle. “From their general code of conduct for collections, to their specifics on ethical loan recovery procedures, SFPL’s policies clearly embody elements of our Client Protection Principles.”

In late March, the Smart Campaign will launch its fifth industry-wide Call for Tools, which will seek the best available documents related to the Client Protection Principle dealing with ethical staff behavior.

“Code of Conduct for Collections and Collections Practices for Group Loans” is one of many tools available on the Smart Campaign’s website, www.smartcampaign.org.

To read the press release recognizing SFPL and providing additional information about the company and the Smart Campaign, please click here.

Image credit: Mareklug