XacBank has been granted Smart Campaign Certification

XacBank was evaluated the entire operation by Planet Rating, French based internationally accepted, microfinance and social rating agency, and granted the Smart Campaign Certification with our outstanding achievement and implementation of globally endorsed Client Protection Principles standard into our operations in August 2015.

XacBank is now one of 39 organizations that have successfully implemented and Client Protection standard of total 7 principles and 99 indicators into entire operation of the organization worldwide.

In 2014, XacBank was granted the grade “4”,“Convincing” which is the highest grade given by Planet Rating to an institution in Asia for a Social Performance rating proving that the institution has excellent practices, and is likely to achieve a positive social impact. At the international level, XacBank ranks in the top 15 MFIs out of the Social Performance ratings performed so far by Planet Rating agency.

Bank has core values of Corporate Social Responsibility along with Innovation, Customer Centricity, Professionalism, Energy, and Inclusiveness from its establishment and appreciates the international recognition of Smart Certification and Social performance achievement as proof that we act not as just commercial bank but lifelong commitment and reliable partner to our clients.

http://www.smartcampaign.org/certification/certified-organizations#XACBank

Building lifelong commitment to our clients needs is reason of our existence.

What is SMART Campaign Certification

The Smart Campaign is a global effort to unite microfinance leaders around a common goal: to keep clients as the driving force of the industry.

Smart Campaign is initiative of The Center for Financial Inclusion at Accion to To help the microfinance industry remain both socially focused and financially sound, The Smart Campaign is working with microfinance leaders from around the world to provide microfinance institutions with the tools and resources they need to deliver transparent, respectful, and prudent financial services to all clients. By putting clients first and collaborating together, we can strengthen the microfinance industry and elevate it as a model of responsible banking around the world.

Organizations that have successfully implemented the 7 Client protection principles and passed 99 indicators, listed below in detail, of successful implementation to the operation by authorized rating agency are subject to grant a Smart Campaign Certification

CPP – 1: Appropriate product design and delivery

• Suitable products- Multiple and/or flexible loan products address different business and family needs
• Suitable design - Repayment schedules are flexible and match cash flows. Loan size matches financial need.
• Suitable delivery - Services are reliable, convenient, and function as advertised.
• Simplicity - Product terms and conditions are easy for clients to understand and compare.
• Affordability - The product cost, size (or coverage), and frequency of payment fit within the client’s capacity to pay.
• Minimum changes - Changes to the product (cost, terms, conditions) are minimal/ infrequent.

CPP – 2: Prevention of over-indebtedness

• Over-indebtedness monitoring - Management and Board are aware of and regularly monitor client over-indebtedness.
• Client capacity evaluation - Loan approval requires evaluation of client repayment capacity and loan affordability—approval is not based only on guarantee/collateral.
• Credit limitation - Credit policies give guidance on debt thresholds and acceptable amount of debt from other sources.
• Loan history verification - If available, check the credit bureau. If unavailable, maintain and check internal records and consult competitors.
• Audit credit procedures- Use internal audit to verify staff compliance with the procedures that prevent over-indebtedness.
• Performing loan promotion - Set targets and incentives that value portfolio quality as least as highly as portfolio size and growth.

CPP – 3: Transparency

• Public disclosure - Disclose the prices, terms, and conditions of all products, including fees and information on the recovery process, and whether these can change over time.
• Internal training - Train staff to communicate effectively with clients, including clients with literacy limitations.
• Total pricing transparency - Follow truth-in-lending laws and required APR or EIR formulae. If no requirements, show at least the total cost the client pays.
• Using multiple channels - Use multiple channels for disclosing information, such as brochures, meetings, orientation sessions, posters, etc.
• Provision of question and review time - Allow adequate time for clients to review information and ask questions prior to signing contracts.
• Provide clients with account information - Regularly provide accurate account information, such as savings account balances and receipts for all transactions.

CPP – 4: Responsible pricing

• Competitive pricing - Set prices that are not subsidized, are market oriented, and competitive within the country context.
• Reasonable budget - Earn a rate of return that supports operations and growth, and does not deviate significantly from peers.
• Budget spending to client - Invest a portion of the profits to increase value to clients, such as lowering interest rates or adding or improving products and services.
• Do not pass inefficiencies to the client - Compare efficiency to similar competitors and do not transfer inefficiencies to clients.
• Set reasonable fees - Do not charge excessive penalties /fees for pre-payment, account closure or other services. For example, fees should not unreasonably compound debt nor prevent a client from changing providers.

CPP – 5: Fair and respectful treatment of clients

• Set ethical standards - Spell out organizational values and standards of professional conduct for staff in a Code of Ethics. It should be approved by the Board and signed by staff.
• Set appropriate debt collection practices - Establish the precise steps to take in case of default including actions that should not be taken and behavior that is prohibited. Inform clients of their rights and the highlights of the Code.
• Train staff on ethics - Recruit and train staff in line with Code of Ethics. Train collections staff on appropriate practices for loan recovery.
• Set fair collateral policies - Establish: 1) a policy on acceptable pledges of collateral (don’t accept assets vital to survival) and 2) a policy on rescheduling loans for clients who are willing to repay.
• Incentivize appropriate behavior - Use incentives that encourage ethical behavior and do not put staff in a “conflict of interest” with the clients—particularly during loan collection.
• Enforce penalties for violations - Monitor staff compliance with ethical standards and enforce sanctions for non-compliance. The same rules should apply to third-party collections agents.

CPP – 6: Privacy of client data

• Use privacy policy - Use a written privacy policy that governs the gathering, processing, use, and distribution of client data.
• Use appropriate systems - Use technology that keeps client data secure. Train staff to keep data confidential, secure, and accurate.
• Inform clients - Inform clients how their information will be used internally and externally—including data shared with 3rd parties and the use of photos.
• Obtain client permission - Obtain client consent for using information in promotions, marketing materials, and other publications; and for sharing personal information with any external parties, including credit bureaus.
• Train clients - Offer information, orientation, or educational sessions to clients on how to safeguard information, access codes/ PIN numbers, and group information.

CPP – 7: Mechanisms for complaint resolution

• Set complaints policy - A written policy requires customer complaints to be taken seriously, fully investigated and resolved in a timely manner without bias.
• Actively use a mechanism - Put in place a mechanism to handle customer complaints, dedicate staff resources to it, and ensure that it is actively used.
• Train staff - Train staff to handle complaints and refer them to the appropriate person for investigation and resolution.