The SECP has issued guidelines for grievance redress system in Non-Bank Microfinance Companies (NBMFCs) to protect the interests of clients here on Friday.
It should be ensured that the understanding capacity of these persons is given ample weightage while deciding the complaint. Old age complainants should be treated empathically and to the maximum possible extent their complaint should be resolved preferably at the branch level for their convenience, SECP added.
Accordingly, the NBMFCs are required to put in place a complaint handling policy and detailed procedures to deal with clients' complaints. Furthermore, the NBMFC shall designate a key executive to look after the complaint handling mechanism. NBMFCs should also ensure that their complaint handling mechanism is visible and easily accessible to all customers.
The guidelines have been issued through Circular No. 24 of 2018 dated December 27, 2018, to facilitate and guide the NBMFCs for effective and efficient resolution of clients' complaints. Further, it is hoped that these will not only increase customer satisfaction but will also reduce operational and reputational risk of the NBMFC.
In addition, the SECP has also specified certain requirements for branches of NBMFCs through Circular No. 23 of 2018 dated December 27, 2018. Accordingly, the NBMFC are required to display certificate of incorporation and valid license issued by the SECP to conduct the business of microfinancing at appropriate place in the branch offices. Moreover, NBMFCs are required to have properly trained staff, security arrangements for the safety of documents and staff, proper customer support for filling up of applications and product information at the branches. Both the circulars are available on SECP's website at http://www.secp.gov.pk
The NBMFC shall designate a key executive to look after the complaint handling mechanism. It is expected that the NBMFCs will address the possibility of conflict of interest while assigning the compliant handling mechanism to a key executive.
The NBMFCs shall also ensure that the complaint handling function works independently and have adequate powers and resources.
The NBMFCs are required to put in place a complaint handling policy and delineate detailed procedures to deal with complaints. The policy and procedure should be duly approved by the board of NBMFC.
The procedures should clearly define the complaint resolution process, roles and responsibilities of people involved right from the receipt of a complaint to its resolution or disposal.
The procedures should also outline the mechanism of review and analysis of the complaints and how corrective measures shall be taken to fix the lacunae in a product or procedure as identified through analysis of complaints.
NBMFCs should implement a system designed to capture all complaints data for analysis. The complaint information should include total number or complaints, complaint grouping by product type, information on resolution times and themes. The findings of this report should be shared with the management/board on annual basis to carve out a strategy for the betterment of the complaint management system, reductions in incidence of complaints and bring improvements in products, services, processes and delivery channels.
The internal complaint handling mechanism of NBMFCs should be subject to internal audit at least annually and any deviation or non-compliance of internal procedures as well as legal /regulatory requirements should be recorded and reported to board of directors. The internal audit should also review complaint data and highlight any significant operational risk that the NBMFC may encounter.