Smart Campaign Client Protection Certification

Early in 2013, the Smart Campaign launched the Client Protection Certification Program for which MicroRate is a licensed certifier.

The program allows institutions to publicly demonstrate their commitment to client protection through an independent, third-party evaluation of their practices.  MicroRate worked for over two years with industry stakeholders and the Smart Campaign to develop the standards and methodology for this certification.

This program was designed to complement MicroRate’s existing rating products, and institutions that are scheduling ratings should consider having a Client Protection Certification at the same time to be more cost effective.   To see the list of certified organizations, click here.

To learn more about having your institution certified, contact us at

About the Certification

MicroRate offers retail financial service providers serving low-income clients the opportunity to become Client Protection Certified through a certification mission.  Certification involves evaluating a provider’s policies, procedures, training, marketing and operations with a defined set of standards derived from the seven Client Protection Principles.   These standards represent the minimum that clients should expect when doing business with a financial institution.   Unlike ratings, which grade performance on a relative basis, a certification mission measures practices against specific, industry-wide benchmarks.

Certification is pass/fail and passing institutions’ results will be public while financial institutions that do not pass certification will share results only at their own discretion.  This is in keeping with the intent of the certification program to incentivize improved practices.

Certification Methodology

A financial institution will be evaluated through a streamlined desk review and on-site due diligence process that will include staff and client interviews/feedback.  Financial institutions will be asked to share key documents with MicroRate’ s certification team – fieldwork will only be scheduled if the financial institution has submitted all the required information and is responsive to the certification team’s questions.

During the field review MicroRate’s certification team will examine how the financial institution performs compared with the certification standards at three broad levels a) market and regulatory context b) institutional policies, procedures and systems, and c) organizational culture and how policies are reflected in staff behavior.  The certification team will hold interviews with leadership, management and key line staff.  The certification team will also conduct several focus group discussions with the institution’s clients.  The field review typically takes four to five days.

Several weeks after the field mission, MicroRate will share their decision with the financial institution on whether the institution has passed or failed the certification process.  Financial institutions that fail to meet one or more of the indicators will be given a certification status report that identifies the areas where they have weaknesses and will have a short window of time to put in place corrective measures to improve their practices and become certified.  Financial institutions that fail to become certified will be allowed to re-apply for a mission after approximately six months.

Value-Added of Certification

While the microfinance institutional rating (MIR) and social rating products have sections on client protection and entail the review of similar documents to the certification missions, there are a number of benefits from conducting a Client Protection Certification.

At a conceptual level, the lenses through which we judge client protection in a MIR/social rating is whether or not an institution’s practices create risk to institutional sustainability.   The Smart Campaign’s certification program goes one important step farther. It provides a separate, specific reading on the quality of client protection practices. It examines client protection from the perspective of clients, addressing the question, “Does this institution do what it should to ensure that clients receive fair treatment?”

Also, the Client Protection Certification represents adherence to a set of harmonized, global standards and provides a more in-depth evaluation of client protection.  Finally, the mark of the Client Protection Certification is highly valued by the industry, including microfinance networks, investors and donors, as ‘doing no harm to clients’ and is the minimum level of behavior that most stakeholders expect from the sector.  Organizations should view this certification as a public mark of achievement.

What do I do first?

The Smart Campaign recommends that any institution interested in certification conduct an internal review of their practices against the certification standards. The Getting Started Questionnaire tool is a good starting point for this purpose. If an institution needs to improve its practices, there are additional Smart Campaign tools available. Certification is achievable for most institutions with time and effort but each will have its own timeline.

What are my options?

  1. Stand-alone certification mission
  2. Combined rating & certification – We encourage organizations that are scheduling ratings– and that have strong client protection practices – to consider requesting a Client Protection Certification at the same time as a rating.

Client protection certification was designed to work in parallel with ratings. When a Client Protection Certification field visit is combined with a rating visit, it is much more cost effective than a standalone certification. And because only one on-site visit is needed, combining ratings and certification is less burdensome for the institution.

To learn more about having your institution certified, please contact us

The Client Protection Principles

The Client Protect Certification process includes an evaluation of each of the seven Client Protection Principles:

  • Appropriate product design and delivery
    Providers will take adequate care to design products and delivery channels in such a way that they do not cause clients harm. Products and delivery channels will be designed with client characteristics taken into account.
  • Prevention of over-indebtedness
    Providers will take adequate care in all phases of their credit process to determine that clients have the capacity to repay without becoming over-indebted. In addition, providers will implement and monitor internal systems that support prevention of overindebtedness and will foster efforts to improve market level credit risk management (such as credit information sharing).
  • Transparency
    Providers will communicate clear, sufficient and timely information in a manner and language clients can understand so that clients can make informed decisions. The need for transparent information on pricing, terms and conditions of products is highlighted.
  • Responsible pricing
    Pricing, terms and conditions will be set in a way that is affordable to clients while allowing for financial institutions to be sustainable. Providers will strive to provide positive real returns on deposits.
  • Fair and respectful treatment of clients
    Financial service providers and their agents will treat their clients fairly and respectfully. They will not discriminate. Providers will ensure adequate safeguards to detect and correct corruption as well as aggressive or abusive treatment by their staff and agents, particularly during the loan sales and debt collection processes.
  • Privacy of client data
    The privacy of individual client data will be respected in accordance with the laws and regulations of individual jurisdictions. Such data will only be used for the purposes specified at the time the information is collected or as permitted by law, unless otherwise agreed with the client.
  • Mechanisms for complaint resolution
    Providers will have in place timely and responsive mechanisms for complaints and problem resolution for their clients and will use these mechanisms both to resolve individual problems and to improve their products and services.

To learn more about the Smart Campaign, click here.

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