Tools & Resources Code of Conduct for Collections and Collections Practices for Group Loans at Swadhaar FinServe Pvt. Ltd.

Code of Conduct for Collections and Collections Practices for Group Loans at Swadhaar FinServe Pvt. Ltd.

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Swadhaar FinServe Pvt. Ltd. shared their Code of Conduct for Collections and their Collections Practices for Group Loans, both of which provide collections staff with specific guidelines and procedures for treating clients with dignity. The Smart Campaign encourages other institutions to review this good practice.

Institutions that observe the principle of Appropriate Collections Practices treat clients with dignity even when clients do not meet their contractual obligations.

In January 2011, the Smart Campaign issued a Call for Tools to the microfinance industry: “Tools on Appropriate Collections Practices.” We asked institutions to send us examples of their collections guidelines that define “appropriate” and “inappropriate” practices, and that guide collections staff on how to treat clients with dignity.

Swadhaar FinServe Pvt. Ltd. submitted the winning tool. The Indian institution shared their Code of Conduct for Collections and their Collections Practices for Group Loans, both of which provide collections staff with specific guidelines and procedures for treating clients with dignity during the collections process.

The Smart Campaign encourages other institutions to review this good practice example when evaluating and improving their own collections guidelines. In particular, Swadhaar provides a good example of an institution that provides specific definitions for unacceptable practices.

The Smart Campaign evaluated all Call for Tool submissions with the following criteria:

1. Compatibility with the Smart Campaign’s guidelines on appropriate collection practices.
2. Compatibility with the other 5 principles.
3. Inclusion of specific guidelines on collections do’s and don’ts.
4. Codes of ethics for collection agents, including acceptable/unacceptable behavior.
5. Policies and procedures for collections, including standard procedures and clear, detailed steps and timeframes for collections.
6. Emphasis on providing good customer service, and treating clients with dignity.

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