Sa-Dhan, an association of 190 financial services providers in India, and the Smart Campaign of US-based NGO Accion recently announced the launch of an online monitoring tool intended to increase consumer protection and reduce over-indebtedness in India’s microfinance industry. Workshops will be scheduled around the country to help Sa-Dhan’s members use the tool to identify potentially oversaturated markets and investigate the “risk of non-compliance to India’s microfinance Code of Conduct.”
Sa-Dhan’s members, which include microfinance institutions (MFIs), self-help groups (SHGs), banks and cooperatives, serve 29 million customers in 33 states and hold an aggregate gross loan portfolio of INR 468 billion (USD 6.8 billion) as of 2018. Sa-Dhan has been recognized by the Reserve Bank of India (RBI) as a self-regulatory organization, which gives Sa-Dhan the power to monitor its member MFIs, including the responsibility to see that they meet various standards for client protection. For the year ending March 31, 2017, Sa-Dhan reported annual revenue of INR 25 million (USD 391,000).
Accion and the World Bank Group’s International Finance Corporation (IFC) provided funding and technical support to the effort.
Founded in 2008, the Smart Campaign seeks to strengthen the microfinance industry, including MFIs, networks, associations, investors, donors and individuals. As of 2017, Smart Campaign has approximately 5,000 endorsers including about 1,800 MFIs. The program’s supporters include Accion, Deutsche Bank, IFC, the Small Industries Development Bank of India and the Asian Development Bank.
Accion seeks to alleviate poverty by offering services such as microenterprise loans and business training. It was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions (MFIs) provide loans to entrepreneurs through 64 MFIs in 32 countries in Africa, the Americas and Asia. As of December 2017, Accion has USD 375 million in total assets.
IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2017, IFC reports total assets of USD 92.3 billion, and it has 184 member countries.
By Michelle Fleming, Research Assistant
Sources and Additional Resources
Accion press release
https://www.accion.org/sa-dhan-the-smart-campaign-launch-ifc-backed-monitoring-tool-to-strengthen-consumer-protection
Accion homepage
https://www.accion.org
IFC homepage
https://www.ifc.org
Sa-Dhan homepage
http://www.sa-dhan.net
Smart Campaign homepage
https://www.smartcampaign.org
MICROCAPITAL EVENT: Sa-Dhan NAtional Conference Propelling the Growth of the Informal Sector through Microfinance
https://www.microcapital.org/microfinance-event-sa-dhan-national-conference-propelling-the-growth-of-the-informal-sector-through-microfinance-september-19-20-2018-new-delhi-india/
MICROCAPITAL BRIEF: Point of Sale Provider Yoco of South Africa Raises $16m in Equity from Accion Frontier Inclusion Fund from Paratech
https://www.microcapital.org/microcapital-brief-point-of-sale-service-provider-yoco-of-south-africa-raises-16m-in-equity-from-accion-frontier-inclusion-fund-fmo-paratech/
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