ESG and Consumer Protection Working Group

Purpose

The ESG and Consumer Protection working group is tasked with promoting and overseeing initiatives that strengthen consumer protection in the microfinance sector. This includes advocating for ethical practices, client empowerment, transparency, grievance redress mechanisms, and compliance with regulatory frameworks to promote responsible financial inclusion. In addition, the group is tasked to support initiatives to mainstream responsible finance practices and ESG integration across microfinance actors.

Objectives

Promote adherence to client protection principles among the financial service providers.
Support the development and enforcement of consumer protection policies and industry codes of conduct.
Monitor and assess the consumer protection landscape in the sector
Facilitate awareness and capacity-building among providers and clients on consumer rights and responsibilities.
Engage with regulators and advocacy bodies to enhance the policy and legal environment for client protection.
Share experience and create opportunities for learning on ESG.
Challenges faced along the way together with new innovations will also be discussed in this committee.

Scope of Work

Support the development, compliance and updating of the consumer protection guidelines and codes of conduct in the sector.
Coordinate sector-wide campaigns on financial literacy, digital literacy and consumer rights and obligations.
Support the establishment and strengthening of internal and external complaint resolution systems.
Review and provide recommendations on emerging risks to client welfare (e.g., over-indebtedness, data privacy, predatory lending).
Promote use of tools like customer satisfaction surveys, social audits, and consumer scorecards.
Serve as a technical resource for members on consumer protection issues and practices.
Develop ESG frameworks for MFIs.
Build sector capacity for social performance management and green finance.