Since outlining some criticisms of microfinance, there has been work done in different parts of the globe to better protect customers of microlending.
SKS Microfinance announced on February 1 that it has appointed Verghese Jacob as ombudsman, making it the only Indian microfinance institution to have such a system in place for customer protection and grievance redressal. The news follows shareholder and Reserve Bank of India approval of raising the investment limit of foreign institutional investors from 24 percent to 74 percent and an anticipated financial turnaround.
“The appointment of Verghese Jacob as our ombudsman showcases SKS Microfinance Limited’s commitment to continue its pioneering customer protection and grievance redressal initiatives including its toll-free Helpline (1800 300 10000) in eight Indian languages, constant vigil on process, system and regulatory compliance and customer awareness programmes over the years,” says MR Rao, managing director & chief executive officer, SKS Microfinance Limited.
Meanwhile, the Ghana Association of Microfinance Companies (GAMC) is protecting the microfinance industry and safeguarding depositor funds.
Over 350 companies have been registered with the association to operate under the Bank of Ghana’s new rules and guidelines. This means they must hold an initial minimum paid-up capital of Gh¢100,000.00 per office.
The GAMC is recognized by the Bank of Ghana as an umbrella professional body to instill discipline in the industry.
Under the new guidelines, company names must be amended with the word “microfinance” to distinguish themselves from other susu businesses. Hopes are to eliminate unscrupulous microfinance institutions in the system.
Collins Amponsah-Mensah, National Board Chairman of the GAMC, warns the public against giving money to receiving companies without checking their background.
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