Islamabad, Feb 17: The Securities and Exchange Commission of Pakistan (SECP) has introduced Consumer Protection Principles for Non-Banking Microfinance Finance Companies (NBMFCs), with an emphasis on improving transparency and fairness for borrowers. The new directive, under Circular No. 5 of 2025, requires NBMFCs to provide a Key Fact Statement (KFS) to borrowers prior to loan disbursement.
Key Requirements:
- KFS Display: NBMFCs must present a summary of the Key Fact Statement in a clear and accessible format, preferably in the local language.
- Loan Contracts: The contracts must be available in the local language and a signed copy must be shared with the client and kept in the NBMFC’s records.
- Fee and Cost Disclosure: NBMFCs must clearly disclose all fees, charges, and the total cost of credit, including interest rates and other applicable fees, both at the time of loan screening and disbursement.
- Risk Communication: Risks associated with each financial product should be communicated transparently to the borrower.
- Multi-Channel Accessibility: Information about products and services must be accessible through multiple platforms, such as in-person, online, and mobile, in various languages to cater to a diverse clientele.
- Staff Training and Gender Disaggregated Data: Staff must be trained to handle grievance redressal properly, and gender-disaggregated data, including complaints, must be reported.
These new principles aim to ensure consumers are well-informed, treated fairly, and empowered to make sound financial decisions. They align with broader efforts to enhance financial inclusion and uphold the women equality in finance policy within the non-banking microfinance sector.
