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Hans India
19-06-2025
- Business
- Hans India
Sa-Dhan Launches Toll-Free Number to Strengthen Grievance Redressal in Microfinance Sector
Bengaluru: Amidst growing concern around borrower stress, delinquencies, and the evolving regulatory landscape, Sa-Dhan—the RBI-recognised Self-Regulatory Organisation (SRO) for the microfinance sector—hosted a national conclave today in Bengaluru titled 'Emerging Role of Microfinance in the Changing Financial Landscape.' The day-long event brought together senior leaders, institutional heads, and compliance experts to reflect on the state of microfinance, introduce practical tools for client protection, and engage with emerging challenges including recent policy developments in Karnataka. At the centre of the discussions was the launch of a toll-free grievance redressal number and the release of a Client Grievance Redressal Mechanism (CGRM) manual, developed with M2i Consulting. These steps mark a sector-wide push to improve transparency, client trust and institutional accountability. Delivering the keynote at the inaugural session, Jiji Mammen, Executive Director and CEO of Sa-Dhan, reinforced this view. 'Responsible lending and client protection are at the heart of financial inclusion,' he said. 'A robust grievance redressal mechanism is central to this effort — not just in form, but in spirit. It must be implemented meaningfully to ensure that clients feel heard and supported at every step.' The event brought together senior leaders and compliance heads from across the sector. The first panel reflected on microfinance's role in reaching underserved communities and its resilience through recent disruptions. While the sector comprises only 3% of India's total retail finance market, its impact is significant. Panellists spoke of the need for tailored, tech-enabled solutions that retain the human touch. The CGRM manual, launched by Deepak Alok of M2i, is designed to help especially smaller MFIs build effective internal systems. It includes process flows, escalation protocols and tools to support ongoing training and monitoring. A second panel explored how grievance redressal is becoming central to institutional strategy. Participants from Ujjivan SFB, IDF Financial Services, Spandana Sphoorty and Svamaan Financial Services shared evolving practices—from board-level oversight to mystery audits and gender-sensitive support structures. The new toll-free helpline is managed in-house and currently operates in Hindi and English, with plans to expand to ten regional languages. It serves as a second-level grievance platform—bridging the gap between the MFI and the RBI. Closing the event, Somesh Dayal, Deputy Director at Sa-Dhan, shared plans to roll out the manual across regions over the next six months, through webinars and in-person training sessions for grievance and compliance officers. As borrower protection gains ground in both policy and practice, the conclave underscored the sector's shared commitment: not just to meet regulations, but to strengthen trust and accountability where it matters most—at the client level.
Time of India
18-06-2025
- Business
- Time of India
Microfinance sector introduces new grievance redressal tools for customer protection
To boost customer protection in the microfinance sector, Sa-Dhan , the RBI-recognised Self-Regulatory Organisation (SRO), on Tuesday launched a sector-wide toll-free grievance helpline along with a comprehensive Client Grievance Redressal Mechanism (CGRM) manual. The new toll-free helpline is managed in-house and currently operates in Hindi and English, with plans to expand to ten regional languages, Sa-Dhan said in a statement. It will serve as a second-level grievance platform and bridging the gap between the MFI and the RBI . The CGRM manual has been designed to help smaller MFIs build effective internal systems. It includes process flows, escalation protocols and tools to support ongoing training and monitoring. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Accounting Automation Software Might Help You To Earn More Accounting Automation Software | Search ads Undo During the national conclave held in Bengaluru on the theme 'Emerging Role of Microfinance in the Changing Financial Landscape,' the two initiatives were announced in collaboration with M2i Consulting. The SRO said these efforts aim to build greater transparency, trust, and accountability in microfinance operations. The event revolved around the state of microfinance, practical tools for client protection, and engaging with emerging challenges including recent policy developments in Karnataka. Live Events 'Responsible lending and client protection are at the heart of financial inclusion ,' said Jiji Mammen, Executive Director and CEO of Sa-Dhan, during his keynote address. 'It's important that grievance redressal is not just a process but a meaningful commitment to our clients,' he added. The organisation said that while microfinance forms just around 3% of India's overall retail lending market, its role in supporting underserved communities is seen as critical. Industry leaders from institutions like Ujjivan SFB , Spandana Sphoorty , and Svamaan Financial Services discussed how grievance redressal is becoming central to institutional strategy, with measures such as board-level oversight, gender-sensitive processes, and regular mystery audits.
The Hindu
15-06-2025
- Business
- The Hindu
Tamil Nadu government notifies law to prevent coercive recovery of micro-loans
The State government has notified the Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Act, 2025, which is meant to prevent coercive recovery of micro-loans by money-lending entities. The Assembly passed the legislation in April, and it received the Governor's assent on June 9. The Act is aimed at protecting the weaker and vulnerable groups and individuals — especially farmers, women, and self-help groups — from the coercive recovery of loans by money-lending entities such as micro-finance institutions and money-lending agencies operating in Tamil Nadu. It shall apply to all money-lending entities, including digital lending platforms, but not to banks, non-banking financial companies registered with the Reserve Bank of India, and co-operative banks and societies. However, the provisions of the Act relating to coercive action against the borrower shall apply to non-banking financial companies registered with the RBI and co-operative banks and societies. Micro-loan means a loan given to a household having an annual household income of upto ₹3 lakh. A household means an individual family unit: husband, wife, and their unmarried son and daughter. Borrower means an individual or group of individuals or a self-help group or joint liability group, according to the Act. Section 20 of the Act also lists what constitutes coercive action. This includes obstructing or using violence against or insulting or intimidating the borrower or any of his family members. Using the service of private or outsourced or external agencies to negotiate or urging the borrower to make payment using coercive and undue influence or seeking to take forcibly any document of the borrower which entitles him to benefits of government programmes, any other vital documents, articles or household belongings also amounts to coercive action. The Act stipulates imprisonment and penalties, depending on the violation of the coercive clause. The government will appoint a Registering Authority. The Act states that the Registering Authority can take complaints suo motu or receive and forward the same to the jurisdictional police. Rules laying down the procedure for registering complaints are yet to be notified, says advocate R. Thirumoorthy. The Act mandates the police not to refuse complaints, he adds. 'The Act has exempted the regulated entities from its purview. However, the clause on penalty for coercive practice is made applicable to all, except banks. We only hope that this clause will not be misused by borrowers or law-enforcement agencies... We are also against any coercive practices in recovery and we have given adequate instructions to that effect,' says Jiji Mammen, executive director and CEO of Sa-Dhan, a self-regulatory organisation for the micro-finance industry.
The Hindu
02-06-2025
- Business
- The Hindu
Tamil Nadu sees drop in microfinance gross loan portfolio in fiscal 2025
The Gross Loan Portfolio (GLP) of the microfinance industry in Tamil Nadu has declined in fiscal 2025, influenced by anticipated ordinances and increased regulatory intervention on collection practices, according to CRIF High Mark, a credit bureau. According to data from CRIF, the GLP in Tamil Nadu declined by 19.6% to ₹46,800 crore in fiscal 2025, from ₹58,200 crore in fiscal 2024. On a quarter-on-quarter basis, the GLP fell 7.7%, from ₹50,700 crore. Tamil Nadu (-7.7%, quarter-on-quarter basis), followed by Karnataka (-7.0% quarter-on-quarter basis), recorded steep GLP decline. State-level data revealed notable contractions in Tamil Nadu and Karnataka portfolios, influenced by anticipated ordinances and increased regulatory intervention on collection practices, the credit bureau said. Overall, the microfinance industry's GLP stood at ₹381.2K crore as of March 2025, marking a 2.6% decline quarter-on-quarter and a 13.9% drop year-on-year. The Tamil Nadu government has proposed to come out with a legislation aimed at fair collection and recovery practices, signalling further regulatory shifts in the sector, the further impact of which is yet to be seen, CRIF said. In April 2025, the Tamil Nadu Legislative Assembly passed the Tamil Nadu Money Lending (Prevention of Coercive Actions) Act, 2025. The Bill aims to protect and relieve the economically weaker and vulnerable groups and individuals from the undue hardship of coercive means of recovery of any loans by money-lending lending entities, such as microfinance institutions, money-lending agencies, and money-lending organisations. 'The fall in the gross loan portfolio was in line with the national trend. There were numerous factors involved, including the elections, impact of heatwaves and cyclones in some parts, and also over-leverage by borrowers in certain pockets affecting recoveries,' according to Jiji Mammen, executive director and CEO of Sa-Dhan, a self-regulatory organisation for the microfinance industry. The proposed Tamil Nadu legislation clearly excludes regulated entities. He claimed that with the passing of the Bill, some people in certain pockets have tried to take advantage of it by refusing to pay; however, overall, business has remained normal. Sa-Dhan has made a representation to the State government regarding the inclusion of all types of lenders under the 'coercive' clause in the Bill, which can get misrepresented. 'We have sought suitable amendments when the rules are framed to exclude regulated entities from the coercive clause,' he added. Aditi Singh, chief strategy officer, Satin Credit Network Ltd, which has a portfolio of ₹227 crore in Tamil Nadu, said during the initial discussions around the Bill, 'we took a cautious approach by slowing down disbursements in Tamil Nadu to evaluate the on-ground situation. However, after assessing the situation and seeing there is normalcy at the ground level, we gradually resumed business operations.'
United News of India
04-05-2025
- Business
- United News of India
BOI signs MoU with Sa-Dhan to boost financing for small, micro and women-led enterprises
Kolkata, May 03 (UNI) Bank of India has signed a Memorandum of Understanding (MoU) with Sa-Dhan, an RBI-appointed self-regulatory for microfinance and impact finance institutions, to enhance financing access for small, micro and women-led enterprises. The two organisations will collaborate to achieve key National Financial Inclusion and Sustainable Development Goals (SDGs). The MoU is a non-commercial arrangement outlining key areas of collaboration, including enterprise finance for SHGs and non-SHG members, climate-resilient technologies and green financing, WASH (Water, Sanitation and Hygiene) financing, co-lending to MFIs, digital transformation and technology adoption, and, most importantly, financial literacy and awareness of government schemes. The MoU aims to enhance collaboration with microfinance institutions to provide affordable, flexible financing to underserved communities, particularly women entrepreneurs. Loan disbursement and monitoring will be enabled through digital platforms. Bank of India and Sa-Dhan will drive initiatives to raise awareness of government schemes, financial services, and social security programmes among rural entrepreneurs. Bank of India Executive Director P.R. Rajagopal said, 'BOI's partnership with Sa-Dhan will strengthen small, micro and women-led enterprises by enabling timely and seamless access to finance, and supporting key financial inclusion and sustainable development goals. It will benefit SHG and non-SHG members, promote climate-resilient technologies through green financing, and expand the scope of WASH and digital literacy initiatives.' Jiji Mammen, Executive Director and CEO, Sa-Dhan, said, 'Our collaboration with Bank of India marks a significant step toward equitable access to affordable finance for enterprises, including SHGs and non-SHGs, while achieving sustainable development goals such as climate financing. Coupled with digital adoption and financial literacy, we aim to expand enterprise financing to rural and semi-urban areas, empowering small businesses and women-led enterprises with flexible lending for inclusive development.' UNI SJC
