Tools & Resources Smart Lending: Client Protection in the Group Lending Process - India

Smart Lending: Client Protection in the Group Lending Process - India

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This guide is designed to help MFIs incorporate good client protection practices into their group lending policies and operations. The tool is applicable to Grameen-style group of groups credit methodology and was developed specifically for Indian MFIs.

Throughout the credit process there are service points (SPs), meaning points of interaction with the clients at which microfinance institutions can implement good client protection practices. This guide is designed to help MFIs incorporate good client protection practices into their group lending policies and operations.

The tool is applicable to Grameen-style group of groups credit methodology and was developed specifically for Indian MFIs.

The group lending process is segmented into five key phases: 1) Client Recruitment & Application, 2) Compulsory Group Training & Group Recognition Test, 3) Group Loan Approval, 4) Disbursement & Customer Service, and 5) Collections & Recovery.

Each of these phases is further segmented into distinct SPs. For each one, the tool demonstrates how an MFI can model good practice in client protection in their policies and operations; and identifies which Client Protection Principles are affected.

The document provides recommendations for the use of client protection tools that could help MFIs improve client protection practices at each SP. Some of these tools have already been developed by the Smart Campaign, but for those not listed on our website, we encourage you to share your tools and/or tool ideas with us ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

While the guidelines offer suggestions for operational steps and policy considerations, they are not a complete solution for implementing client protection in the group lending process. They do, however, help institutions identify areas where additional steps on their part may be necessary to adequately implement client protection practices.

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Download the Guide (French) »