M2i maintains that for micro-finance to sustain, sound operational management practices, which strongly emphasize on ethical behavior and responsible lending are imperative. Towards this M2i has created a framework – Approval, Documentation, Dissemination and Observance (or the ADDO) framework for measurement of the adherence to ethical operational practices by MFIs. M2i developed the code of conduct assessment tool utilizing this framework, to cover the following code of conduct dimensions:

  • Client origination and targeting
  • Loan pricing
  • Loan appraisal
  • Client data security
  • Staff conduct encompassing
    • Communication with clients
    • Loan collection and recovery process
  • Relationship management and feedback mechanism

Small Industries Bank of India (SIDBI) has commissioned Code of Conduct assessment of its partner MFIs in India and has made some of these reports public. They are available on SIDBI’s website (http://sidbi.in/?q=coca-reports). The code of conduct assessment is a pioneering initiative – a global first in the micro-finance domain.