ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has announced ‘Consumer Protection Principles’ for the Non-Banking Microfinance Companies (NBMFCs) and in tandem with women equality in finance policy for the non-banking microfinance sector.
Senior SECP officials told media here on Friday that the principle aims to ensure that consumers are well-informed, treated fairly, and provided with the necessary tools and support to make sound financial decisions, while enhancing transparency, promoting financial inclusion and strengthening the overall relationship between consumers and non-banking microfinance companies.
The NBMFCs are directed to comply with the following requirements and are encouraged to integrate guiding principles into their operations as outlined in the detailed guiding document of the SECP.
The SECP officials informed that the NBMFCs shall ensure clear communication and comprehensive descriptions of terms and conditions, and pricing of the financial products and services.
Before proceeding for loan disbursement, NBMFCs shall display a summary of key fact statement (ICES) to the borrower preferably in local language.
Proposed amendments to NBFCs: SECP, MUFAP, AMCs & Pension Fund officials discuss
The key fact statement shall be presented in a simple, clear and easily accessible format and shall include the minimum information specific to each category.
The loan contracts should be available in local language and a signed copy needs to be shared with the clients along with a signed copy to be kept in the records by the NBMFCs.
Loan repayment schedule needs to be shared with the client at the time of disbursement which is signed by the client and authorised signatory of the NBMFCs.
The SECP officials stated that the NBMFCs shall ensure the following disclosures before proceeding for a loan disbursement: a) Fee Disclosure: Disclose all fees and charges associated with financial products in a clear and understandable manner during screening/formation, approval of loan, and time of disbursement. b) Total Cost of Credit: Clearly explain the total cost of credit, including interest rates, fees, and any other charges. c) Risk Information: Clearly communicate the risks associated with each financial product and service.
The NBMFCs shall ensure that information is accessible through multiple channels, including in-person, online, and mobile platforms, and provided in various languages and formats to cater to a diverse client base.
They added that the NBMFCs shall ensure that staff is trained in handling grievance redressal appropriately.
Copyright Business Recorder, 2025
