Smart Campaign – is a global campaign uniting microfinance leaders worldwide that believe that client protection is not only a right but also a reasonable and smart thing to do. Smart Campaign provides microfinance institutions with the tools and resources needed to deliver transparent,   respectful and prudent financial services to clients and thus help the industry to achieve its dual goal and become a role model of responsible banking in the microfinance sector. 

Smart Campaign turned up at the most crucial stage in the microfinance history.  It was just the right time to focus on client protection, since:

  • Company owners, the society, massmedia and other stakeholders were asking for accountability and transparency on the part of the microfinance sector.
  • A number of countries were facing the problem of overindebtedness.
  • Mass media kept on raising routine questions about real impact of microfinance institutions;  
  • High interest rates were jeopardizing the industry and posing overall reputational risk. 

Given the fast industry expansion and entry of new market players, it became essential to establish industrial standards for ensuring client protection.

In 2008, microfinance organizations from around the world assembled in New-York to consider “harmful” lending practices, such as irresponsible lending and low levels of transparency with regard to pricing.  As a result, the assembly came up with the need to develop a code of conduct that would guide behavior of microfinance institutions with respect to clients.

Client protection principles have been developing for a number of years; they reflect ethical norms and those values, that are strictly followed by numerous companies.

Below are given the 7 principles of the Smart Campaign:  

1.      Appropriate product design and delivery


Appropriate product design and delivery implies that product and delivery channels are designed with client needs and requirements taken into account.   

             The provider should:

  • - Carefully listen to clients before starting product designing process
  • - Offer convenience and reliability
  • - Offer flexibility and transparence
  • - Consider financial indicators while developing a respective product design

2.      Prevention of over-indebtedness

Over-indebtedness implies a situation when individuals borrow more money than they can actually repay.

             The provider should:

         - Offer a product  that will not cause harm to a client and ensure his/her repayment capacity.

         - Take adequate care and ensure disbursement of the loan amount, that the client will be able to repay without incurring additional loans or sacrificing            valuable things.

         - Inform cliants about their right to select products or reject them  at their own discretion.

3.      Transparency

Transperency implies provision of product and service terms and conditions in the language and manner easily understandible for clients. 

              The provider should:

        - Provide clients with full information so that they can make well-informed decisions.

        - Provide information in a plain language, without employing professional terms.            

4.    Reasonable pricing

Reasonable pricing is about setting prices, conditions and terms in a manner that is affordable for both financial institutions and clients.

         - The provider is  responsible to equip clients with all information about loan expenses; their rights and responsibilities.

5.      Fair and respectful treatment of clients

              The provider should:

         - Protect clients against forgery and misleading, cheating and non-ethical treatment.

         - Treat clients in fairly and respectfully.

         - Safeguard that the practice employed in the course of lending and debt collection is fair, protects dignity of clients and accounts for their status.

6.      Privacy of client data

Privacy of client data implies that client personal data will be respected in accordance with the laws and regulations.

             The provider should:

          - Divulge and share information only with authorized persons, on the basis of client consent.

          - Ensure privacy of client data in accordance with legal requirements

          - Ensure use of client data solely for the purposes such information was collected or for ends permitted by law.


7.   Mechanisms for complaint resolution

The given principle implies that providers have responsive and flexible mechanisms in place for prompt resolution of complaints and problems.

             The provider should:

          - Encourage clients to address us with complaints and ensure simplicity and effectiveness of the respective procedure 

          - Ensure timely response to incoming complaints

          - Employ the given mechanism for addressing individual problems as well as improving product and service features.