Code of Conduct Assessment for MFIs: Process, Scope and Benefits
Microfinance institutions provide essential financial services to low-income households, small entrepreneurs and underserved communities. Since many borrowers may be financially vulnerable, MFIs must follow responsible lending, transparent pricing and fair customer-treatment practices. A Code of Conduct Assessment for MFIs , commonly known as COCA, evaluates whether an institution is following applicable regulations, industry standards and client-protection principles in its policies and daily operations. What Is a Code of Conduct Assessment for MFIs? A Code of Conduct Assessment is an independent review of an MFI’s responsible-lending and customer-protection practices. Unlike a financial audit, which focuses mainly on financial statements and controls, COCA examines how the institution treats its borrowers throughout the loan lifecycle—from application and disbursement to repayment, complaint handling and loan closure. The assessment helps determine whether the MFI’s written...