Tools & Resources

Tools & Resources

Due Diligence Checklist for Investors

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This Checklist for Investors is the product of collaboration between CGAP, The Smart Campaign, and many investors. It draws on investor practice and experience. This checklist is not designed as a standalone due diligence tool. Instead, it is designed to lower transaction costs by presenting questions to add to common due diligence topics.

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Complaints-Analysis Spreadsheet (Fundacion Delamujer)

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Fundacion Delamujer has shared with the Campaign their complaints analysis spreadsheet for monitoring and classifying complaints. It is intended to divide complaints according to their importance, type, and branch. 

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Client Protection and Ethics Codes: Examples for Getting Started

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A number of organizations have already adopted either client protection or ethics codes and charters. Following are links to some organizations who have shared their internal codes with the Campaign.

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How to Develop an Institutional Code of Ethics

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Most microfinance institutions already have a Code of Ethics, but many of these Codes are not “living” documents that carry significance within the organization. This short guide provides concrete suggestions for creating or remaking an institutional Code of Ethics. 

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Client Protection Certification Program

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Background

No one argues against the importance of client protection. Indeed, the fact that financial institutions (FIs) should operate in a responsible way vis-à-vis their clients is such a universal principle that it is sometimes taken for granted.

Recent problems highlighted in the press, as well as assessments of financial institutions’ client protection practices by raters, investors, and the Smart Campaign, show that there is still a lot of work to be done to ensure that all microfinance institutions are acting responsibly. The microfinance community has come together around a set of Client Protection Principles (CPPs) which are widely endorsed by financial service providers, funders, investors, supporting organizations, and individuals. In order to provide assurance that the CPPs are being implemented, it is agreed that self-reporting is insufficient.  A process of third-party certification is needed.

Since June 2010, the Smart Campaign has been working with the microfinance industry (through a task force of over 30 experts representing various stakeholders)  to develop a Client Protection Certification Program. The Certification Program will enable financial institutions worldwide to demonstrate their adherence to the Campaign’s core CPPs as verified by third parties. Financial institutions that have met adequate standards in Client Protection will be highlighted publicly.

Several methodologies already exist to assess Client Protection Practices (client protection assessments, client protection evaluations conducted by social raters, social auditors, and the due diligence processes of social investors). It is envisioned that the certification process will build on the existing methodologies, but also be available as a stand-alone product for financial institutions that do not wish to undertake a rating.

 The Certification Task Force has made great progress over the past year to identify the main pillars of the program and the indicators that will comprise the basis for the certification. The task force agreed that certification needs to recognize real achievement in client protection and provide incentives for financial institutions to improve their practices. The task force recognizes that it requires significant commitment and attention to achieve adequate client protection performance. The fact that a financial institution has responsible practices should not be taken for granted, but rather celebrated as a true achievement.

Certification of adherence to the CPPs also requires some level of client validation through means of verification such as focus groups or a survey. The certification process also recognizes and incorporates this important element.

The Certification Program is still in development, and many of the parameters of the program need to be validated through industry feedback from October through December 2011. The testing phase will run in parallel starting in November 2011, with a focus on credit, savings and credit life insurance. Throughout Q1 2012 field testing will take place. The pilot Certification Program is expected to be launched in the first half of 2012.

As the certification process develops, it is important to recognize that due to the recent revision of the Client Protection Principles, a number of areas are still in the formative stage. The recent revision adjusted the Principles to address the broad range of financial services, while the original version focused on credit. An important non-discrimination clause was also added. Since the assessment methodologies available for developing certification were developed around the original version, they will be the focus of the certification at the start. More work will be done to develop methods for assessing: appropriate product design and delivery, insurance (except for credit life insurance, which is already included), payments, agent banking and the incorporation of the notion of non-discrimination. While the Certification Program will first focus on credit, savings and credit life insurance, standards and indicators will be developed for these new areas in 2012 and incorporated into the Certification Program in 2013, so that it reflects the full suite of financial products encompassed in the new Principles.

The Smart Campaign Certification Task Force needs your input!

We hope to receive feedback from all industry stakeholder groups on the proposed program in order to confirm the assumptions, refine the process, and pilot test the proposed adequate standards for client protection. To read the full Certification Program proposal please download the below file and then share your questions and/or comments by sending an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . We will be accepting feedback through the end of February, 2012.

Download the Certification Program Proposal »

Click here to read Frequently Asked Questions about the Certification Program »

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Loan Agreement for Small Business Clients (JSC MFO Crystal)

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JSC Microfinance Organization Crystal, Georgia shared its plain language loan contract with The Smart Campaign.  This contract is used with clients seeking small businesses credit. The contract is succinct, written in plain language, and uses very little jargon.

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Smart Lending: Client Protection in the Individual Loan Process

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This guide is designed to help microfinance institutions with individual lending operations integrate good client protection practices at the intersection points throughout the credit process. At each point in the individual lending process, the guidelines explain how MFI staff should incorporate client protection into policies and operations.

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Complaints-Handling Manual (Tamweelcom)

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Tamweelcom  in Jordan has provided the Campaign with their Complaints Handling Manual, which contains detailed scripts of telephone interactions with clients, a flow chart of the complaints process within the institution, as well as their internal forms to be filled out by both clients and staff when a complaint is lodged. 

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Client Education Tools

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This list represents tools and resources that are models of client protection focused client education materials, chosen to help microfinance institutions communicate to their clients about their rights and responsibilities. The resources are from diverse regions and institution types.

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Conducting Client Protection Assessments: A Guide

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This guide describes the different client protection assessment options available to financial institutions, how your institution can benefit from an assessment, walks you through the assessment processes, and explains how to use your assessment once it is complete.

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