CLIENT PROTECTION: THE STATE OF PRACTICE
A look at client protection practices in Pakistan’s microfinance industry
Due to its developmental origin, it is in the nature of microfinance that clients be placed at the heart of it. Given the reputational risks faced of late, it is pertinent to ensure that the industry – practitioners and investors alike – stay true to the clients they serve. Without doing so, it exposes itself to significant reputational and political risk that can have serious consequences for the industry’s growth and viability. For this reason, wider industry stakeholders have been promising long term sustainability to microfinance practitioners (MFPs) who place clients at the center of their work and subscribe to attaining the minimum standards of client protection, as defined by the global microfinance industry. Indeed, protecting clients is the bare minimum that MFPs ought to do while aiming to reach their social or business objectives. In this respect, tenets of client protection serve as the lowest common denominator for benchmarking practices, as these apply to all microfinance practitioners – irrespective of social mission (which can be quite variable from one institution to the next, ranging from bringing the most marginalized populations out of poverty to simply providing access to formal finance).