An article from Business Standard, a business newspaper based in India, reports that the Microfinance Institutions Network (MFIN) of India, a self-regulated network organization of 39 microfinance institutions (MFIs) in India, will appoint four regional ombudsmen in the next three months to encourage transparency in the microfinance sector. While specific duties of the proposed regulators were not provided, MFIN stated that no appointees would be from MFIs.
The appointment of the ombudsmen comes in the wake of the Code of Conduct that MFIN enacted in March 2010. As MicroCapital reported at the time of the announcement, the Code covers issues including transparency in fair practices with borrowers, multiple lending and lending limits, data and incident sharing, staff recruitment, whistle-blowing and an enforcement mechanism. MicroCapital cited Mr N Srinivasan, author of ‘Microfinance India: State of the Sector Report 2009,’ as stating, “The code of conduct is an attempt to bring down the level of anxiety in policy and regulatory establishments… ?Larger institutions which have much more at stake have found the need to show they are responsible.”
About the Microfinance Institutions Network (MFIN):
The Microfinance Institutions Network (MFIN) is a self-regulatory organization comprised of 39 of India’s microfinance institutions (MFIs). Mr Vijay Mahajan, Chairman of MFIN, is also the Chairman of the BASIX Group, an Indian microfinance institution established in 1996. BASIX Group consists of several companies that provide savings and insurance services to poor households in rural India as well as agricultural/business development services and institutional development services.
By Matthew Fox, Research Associate
Sources and Additional Resources
Business Standard: MFIN to Appoint Four Regional Ombudsmen, July 4, 2010: http://www.business-standard.com/india/news/mfin-to-appoint-four-regional-ombudsmen/400278/
MicroCapital Brief: Experts Debate New Code of Conduct Adopted by the Microfinance India Network (MFIN), May 11, 2010: https://www.microcapital.org/microcapital-brief-experts-debate-new-code-of-conduct-adopted-by-the-microfinance-india-network-mfin/
MicroCapital Universe: Microfinance Institutions Network (MFIN): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Institutions+Network+(MFIN)
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