Microfinance Institutions Network (MFIN), the premier industry association and Self-Regulatory Organisation (SRO) for the microfinance industry, on Tuesday released Mutually Agreed Code of Conduct (MACC).
The MACC is applicable on all entities lending in the microcredit space. The aim of MACC, which was initiated by MFIN, is to provide a uniform set of business conduct rules, which are sector specific and entity agnostic to ensure responsible lending and microfinance client protection, a release said.
The existing regulations of micro credit were only applicable to NBFC-MFIs. However, the microfinance sector has witnessed increased lending by other regulated entities as well such as Small Finance Banks, Banks, NBFCs and non-profit microfinance institutions who lend directly or indirectly through business correspondents. These entities constitute two-thirds of the microfinance loan portfolio but do not have a similar regulatory business conduct framework that are applicable to NBFC-MFIs.
Ratna Vishwanathan, CEO, MFIN said, “Microfinance entities lend to a very vulnerable section of the society. Multiple sources now lending in this sector has opened up more micro-credit avenues for clients and ensured ease of credit access for low-income households.”
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