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Microfinance institutions have decided to make use of Aadhar card mandatory in the next two years for lending. This is a part of the revised code of conduct or self-regulation for the industry players.
The industry association Microfinance Institutions Network (MFIN) had on Wednesday launched the revised code of conduct (CoC) for microfinance organisations in India. The first edition of a unified industry CoC for the microfinance industry was put together in December 2011 and was launched by the two industry associations Sa Dhan and MFIN.
The revised CoC opted for stronger standards on corporate governance, measures to reduce client over-indebtedness, mandating use of Aadhaar over a period of two years, strengthening grievance redressal management and enforcement of the CoC.
“All the changes focus on the fundamental aspects of responsible business and enhanced client protection”, MFIN said in a release.
The revised code also includes a supplementary document 'MFIs Commitment to Customers', to be given to the customers at the time of loan disbursement.
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