Smart Campaign Announces Enhancements To Client Protection Certification Program

Improvements and Additions Align the Program with Certification Best Practices 

The Smart Campaign, a global movement to embed a set of client protection principles into the fabric of the microfinance industry, today announced enhancements to its Client Protection Certification Program designed to improve and accelerate the certification process.

blog_smartThe Smart Campaign’s Client Protection Certification Program contains a core set of standards against which institutions are evaluated by independent, third-party certifiers. Certification publicly recognizes those institutions providing financial services to low income people whose standards of care uphold the seven Client Protection Principles. These principles cover important areas such as transparency, fair and respectful treatment, privacy, and prevention of over-indebtedness.

The changes will enable the program to better meet the growing global demand for certification among microfinance institutions, while ensuring that certified institutions demonstrate high standards and the program maintains strong governance and quality control. The following enhancements will take place immediately.

  • Streamlined certification process. To reduce the time to certification, licensed certifiers may recommend streamlining to financial institutions (FIs) which pass the vast majority of the indicators, and whose gaps are surmountable.  In this case, the FI will receive the certification soon after their mission and the certification will be issued with the understanding that the FI will come into compliance with all standards within a four month period. If they do not comply fully within the agreed time frame, the certification will be withdrawn.
  • Extension of certification validity. Originally set at two years, the revisions extend validity to four years, with a check-in after two. At the two-year midpoint, certified institutions must undergo a review in order to retain their certification. The extent of the review will depend on the scope of changes within the financial institution and changes in the Client Protection Certification standards. After four years, a full certification mission will be required.
  • Appeals and complaints system. An appeals and complaints system is now available to allow for the resolution of grievances that may arise during the certification process. It will also serve as a mechanism for general feedback from the public.

In order to make certification more accessible globally, and to maintain the quality of the certification process, the Campaign is also developing a new accreditation system that will license both existing and new certifiers. The Campaign expects newly accredited certifiers to be on-stream by the end of 2015.

“We have listened carefully to the industry, and we hope these changes will encourage financial institutions to seek certification,” said Isabelle Barrès, director of the Smart Campaign. “These improvements align with best practices in certification, such as environmental certifications and Fair Trade. Our goal is to make the program as cost-effective and user-friendly as possible. We want microfinance clients everywhere to work with institutions that meet high consumer-protection standards.”

To date, 30 MFIs have been certified as meeting the standards for consumer protection; together they serve more than 15 million clients worldwide, from India to Colombia, Kyrgyzstan, Bosnia, Botswana, Pakistan and beyond.

“We are proud of those institutions that have worked hard to qualify for certification,” saidElisabeth Rhyne, managing director of the Center for Financial Inclusion. “They are industry leaders and have set a strong example for others to follow. These changes will strengthen the Campaign’s foundation, making the certification seal a ‘must-have’ for the industry.”

About the Smart Campaign
The Smart Campaign is a global movement to embed a set of client-protection principles deep within the microfinance industry. It is governed by a Steering Committee representing a broad cross-section of the industry and is housed at the Center for Financial Inclusion at Accion. By providing microfinance institutions with the tools and resources they need to deliver transparency, respectful and prudent financial services to all clients, the Smart Campaign is helping the industry maintain its commitment to treating clients fairly. More information on the Client Protection Certification Program can be found here.