Swadhaar Finserve Private Limited (SFPL), an Indian microfinance institution, recently received honors for “Appropriate Collections Practices” from the Smart Campaign, an initiative that focuses on client protection in microfinance. According to Smart Campaign Tool Development Specialist Leah Wardle, “SFPL won our Call for Tools because their policies and procedures for collections are a good example of how microfinance institutions (MFIs) can provide staff with clear expectations for dignified treatment of clients during collections processes. From their general code of conduct for collections to their specifics on ethical loan recovery procedures, SFPL’s policies clearly embody elements of our Client Protection Principles.” [1]. Smart Campaign’s Client Protection Principles focus on non-coercive debt collection practices and other aspects of good governance such as avoiding client over-indebtedness, privacy practices and transparent pricing.
As of 2009, SFPL reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 6.3 million, a gross loan portfolio of USD 4.4 million, approximately 27,300 borrowers, return on assets (ROA) of -20.7 percent and return on equity (ROE) of -38.7 percent. In 2011, SFPL reported an increase of 20,000 borrowers over 2010, thereby increasing its total client base to 51,500 clients [2].
By Medha Ravi, Research Associate
About Swadhaar FinServe Private Limited (SFPL): Based in Mumbai, India, Swadhaar FinServe Private Limited (SFPL) provides microcredit and microinsurance services to low-income groups. As of 2009, SFPL reported to the US nonprofit Microfinance Information Exchange (MIX) total assets of USD 6.3 million, a gross loan portfolio of USD 4.4 million, approximately 27,300 borrowers, return on assets (ROA) of -20.7 percent and return on equity (ROE) of -38.7 percent.
About The Smart Campaign: The Smart Campaign is housed at the Center for Financial Inclusion in Washington, DC, and was founded with seed money from US-based nonprofit ACCION International. It seeks to promote six core consumer protection principles including: avoidance of over-indebtedness, transparent and responsible pricing, appropriate collection principles, ethical staff behavior, mechanisms for redress of grievances and privacy of client data. As of February 2011, over 1,600 microfinance institutions (MFIs), microfinance support organizations, investors, donors and individual industry professionals have endorsed the Smart Campaign.
Source and Resources:
[1] The Smart Campaign Press Release, “Swadhaar Finserve Pvt. Ltd. Earns Honors in Smart Campaign’s Call for Appropriate Collections Practices”, http://www.smartcampaign.org/news-a-highlights/press-releases/36-2011/473-swadhaar-finserve-pvt-ltd-earns-honors-in-smart-campaigns-call-for-appropriate-collections-practices
[2] Reported by ACCION eNews, April 2011
MicroCapital.org story, March 15, 2011, “MICROCAPITAL BRIEF: ACCION International Issues Credit Guarantees Totaling $1.5m to Indian Microfinance Institutions (MFIs) Swadhaar FinServe, Saija”, https://www.microcapital.org/microcapital-brief-accion-international-issues-credit-guarantees-totaling-1-5m-to-indian-microfinance-institutions-mfis-swadhaar-finserve-saija/
MicroCapital.org story, November 1, 2010, “MicroVentures Lends $680,000 to Indian Microfinance Institutions (MFI) Swadhaar Finserve”, https://www.microcapital.org/microcapital-brief-microventures-lends-680000-to-indian-microfinance-institution-mfi-swadhaar-finserve/
MicroCapital.org story, April 5, 2011, “Smart Campaign Releases New Guidance Document, Proposed Revisions to “Client Protection Principles”, https://www.microcapital.org/microcapital-brief-smart-campaign-releases-new-guidance-document-proposed-revisions-to-client-protection-principles/
MicroCapital Microfinance Universe Profile: Swadhaar FinServe Private Limited (SFPL), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Swadhaar+FinServe+Private+Limited
MicroCapital Microfinance Universe Profile: The Smart Campaign: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SMART+Campaign#The_SMART_Campaign
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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