Social Performance Management
Code of Conduct Assessment (CoCA)
Fusion has received 94% score in code of conduct assessment conducted by M-CRIL against the guidelines of unified code of conduct, RBI FPC and RBI guidelines for NBFC-MFI.
Smart campaign has awarded Fusion with Client Protection Certification for embedding client protection practices into the organizational culture and meeting strong standards of client care.
Fusion recognised as a S.T.A.R (Socially Transparent and Responsible) MFI by MIX and has successfully completed the MIX's 'Social Performance Desk Review' process.
Fusion has become endorser of SMART CAMPAIGN and follows its set principles throughout the institution to ensure responsible lending and client protection.
Client Protection Principle at Fusion Microfinance
Client Protection Principle 1: Appropriate product design and delivery
- Fusion designs the products on the basis of its client's feedback and its delivery system uncompleted and easily accessible product outreach for the clients.
Client Protection Principle 2: Prevention of over-indebtedness
- Geography: When Fusion opens the branch it takes into consideration that the area is not overly penetrated. Fusion uses pin code analysis report from the credit bureau to understand the indebtedness of the clients.
- Credit Bureau: We share client's data with the credit bureau (Equifax & Highmark) to check their level of indebtedness. This is done centrally by the credit department. While making any credit decision, if a client has loan from 2 separate MFIs then Fusion will not be the third lender to that client. We adhere to total debt limit as prescribed by the RBI.
- Training of field staff: The branch staff are given training to make necessary enquiries with regard to existing debt of the borrowers and ensure the repayment capacity of the borrowers. They triangulate the information on informal sources of credit from the clients.
- Cash flow analysis: Cash flow analysis is done by the relationship officers while filling up loan application form of the clients. The same details are being cross-checked by the branch managers during the GRT.
- Client Training and awareness: Client's awareness on the ill effects of over-indebtedness is enhanced through financial literacy during the 3 days CGT. In addition, Fusion has done Nukkad natak (street play) in many of its branches.
Client Protection Principle 3: Transparency
- Fusion discloses complete information to clients associated with their loan products such as interest amount, number of instalments, instalment amount, loan processing fee, insurance premium etc. The client's passbook contains a list of all the charges that a client incurs.
- Fair Practice Code and Code of Conduct are displayed in vernacular language in all the branches.
- Mechanisms for grievance redressal are in place like Toll Free Helpline Number, Complaint Registers at branches and Contact details of branch managers and area managers are being provided to the clients.
- Participated in MFtransparency project and have earned MFtransparency Seal of 'Transparent Pricing'.
Client Protection Principle 4: Responsible Pricing
- Fusion complies with the Reserve Bank of India (RBI)'s guidelines on pricing.
- Fusion doesn't charge any penalties to the clients for prepayment.
- Clients can close their loan whenever they want to and no extra costs are charged for that.
Client Protection Principle 5: Fair and Respectful Treatment of clients
- Fusion has been following client protection principle since inception and it keeps updating with the latest guidelines to improve quality of lending, transparency, grievance redressal, ethical behaviour and client protection.
- Induction trainings are given to field officers on Fair Practice code, Code of Conduct, Staff Code of Conduct and Client Protection principle to ensure respectful treatment of clients and fair collection practices.
- Drafted a 'Staff Code of Conduct', which emphasizes on transparent behaviour and professional conduct of staff members towards clients.
- Supervisory level checks and internal audits are in place to monitor aspects of ethical behaviour and conduct with clients.
Client Protection Principle 6: Privacy of Client Data
- During the CGT, clients are being informed that Fusion will treat their information as private and confidential. A disclosure is made in the loan application form on sharing client data with Credit Bureau or any third party. Fusion also seeks client's consent on sharing their data.
- MIS access is rights enabled via a unique employee password which can be accessed by the particular employee only.
- Hard copies of client's files are stored in a central warehouse which can only be accessed by the IT head and with his approval.
Client Protection Principle 7: Mechanism for Complaint Resolution
- Fusion has a toll-free helpline number for client grievance redressal and it is printed on the loan card, on the website and displayed at branches as well.
- Complaint registers at branches are available for clients to record their grievances.
- Grievance Redressal flow-charts in vernacular language is also on display at branches.
- Clients are provided with contact numbers of Relationship officers, Branch managers and Area managers in case they have any complaint.
- Field officers are given training on how to educate clients about Grievance redressal mechanism.
- Clients are being educated each day during Compulsory Group Training (CGT) on different channels of grievance redressal system as well as escalation processes.
- There is a 'Grievance Redressal Officer' at the head office that listens to the complaints and records the details in the grievance log. Concerned branch manager are informed about the grievance received with a copy marked to AM/DM/VP- Operations. The turnaround time (TAT) for grievances is one week. On receipt of revert from the concerned BM, the AM/DM study the resolution and the same is communicated to the clients and the complaints marked appropriately closed.
- All the grievances are monitored and analyzed every month at the 'Management Risk Committee (MRC)'. The committee comprises of CEO, COO and functional heads of each department. The summary of grievances are also shared and discussed with the board members at the quarterly 'Board Meeting'.
Reaching out to 17 poorest and backward districts in U.P and M.P under SIDBI's Poorest States Inclusive Growth (PSIG) programme.
Fusion has gone through the 'Social Performance Management' assessment against the 11 indicators of 'Social Performance Task Force' (SPTF). The assessment was done by EDA Rural Systems.
Fusion has received Social Rating of ∑β+ on governance & strategy, social goals, HR & responsibility to staff and client protection by M-CRIL.
Participated in MFTransparency project and have earned MFTransparency Seal of 'Transparent Pricing'.
Progress out of Poverty Index (PPI), a poverty measurement tool is in place to quantify the level of poverty of its clients, track and measure client's poverty reduction over the time.
- PPI questionnaire has been incorporated in the 'Loan Application Form' and final scores are recorded in the 'MIS' which will form base to track and measure poverty reduction of clients over the time.
- To ensure the responses are captured correctly, our field officers are given trainings apprising them about the PPI, importance of PPI and how to collect client's responses with accuracy.
- Field officers are provided with a 'Short Guide' on the nature and objective of PPI questionnaires so that the final data recorded in the system is not distorted and reflect the true picture while doing the analysis.
- The data entry staffs have been properly instructed on the PPI data entry process.
- Analysis of the baseline and end line PPI data of the clients are being done in order to understand their movement in terms of poverty from first cycle to the second cycle.
Fusion has conceptualized and formulated a pictorial tool kit for raising clients' awareness on financial literacy. Under Financial Literacy Program, clients are being educated on money management, joint liability, proper utilization of money earned and ill-effects of over borrowing.
Drafted a 'Staff Code of Conduct', which emphasizes on transparent behaviour and professional conduct of staffs towards clients.
STAFF CODE OF CONDUCT:
Staff code of conduct during regular collection or handling overdue: It is very necessary that staff conducts itself professionally during regular collections or handling overdue.
Following must be observed at all times:
- Staffs must talk politely, address the clients respectfully
- Under no circumstance staff should talk harshly, loudly or use any threat, abusive or disrespectful language.
- Staff should not show any aggression and should not indulge in confrontation, altercation with client or family members.
- On sensitive occasions such as death, accident, illness or any other tragedy, staff should inform the BM and should not insist on repayment either from the client or from the group members.
- Staffs will not use any physical force or enter dwellings of people.
- Staffs will not visit clients before 8.00am and after 6.30 pm at any location for any business related work.