Sa-Dhan Receives Self-Regulatory Organization Recognition From RBI

NEW DELHI, March 13, 2015 /PRNewswire/ --

Sa-Dhan, one of the oldest and largest national associations of community development finance institutions in the country, has recently been recognized as a Self-Regulatory Organization (SRO) for Non-Banking Financial Companies - Microfinance Institutions (NBFC-MFIs) by the Reserve Bank of India.

Sa-Dhan will now develop and administer a Code of Conduct recognized by the Central Bank; it will ensure borrower protection and education, plan a grievance and dispute redressal mechanism for clients of MFIs. It will also monitor the microfinance sector to ensure they adhere to the regulatory framework put in place by the Reserve Bank of India.

Sa-Dhan believes this will streamline the microfinance sector more and more towards responsible lending and client protection as the key to orderly growth. This approval will help in self-regulation and provide client protection measures for the entire microfinance sector. Most importantly, it will be instrumental in enhancing the fund flow for MFIs and to facilitate a positive investment environment for the MF sector.

According to Mr. Brij Mohan, Director on the Board of Micro Rating International Ltd & Sa-Dhan, "The recognition by RBI is another major step for orderly growth of the Microfinance Sector."

Mr. Jagadananda, Chairman of Sa-Dhan, said, "I am delighted that the RBI has awarded Sa-Dhan this recognition which in itself is a sign of the trust and confidence reposed in Sa-Dhan and its members' unique contribution in the social and financial upliftment of the poor."

Pradeep Malgaonkar, General Manager, SIDBI agrees and also adds, "This is a positive development for the sector and well deserved as Sa-Dhan has ably demonstrated over the last decade and a half its unique role in building the standards and practices for the sector, including its extensive capacity building for Microfinance Institutions and Self Help Promoting Institutions in the country."

Sa-Dhan has 242 members reaching out to 22 states (covering approximately 33 million clients with gross loan outstanding of Rs. 33,000 crores) and includes MFIs (For Profit and Not for Profit), SHG promoting institutions (SHPIs), banks, rating agencies, capacity building institutions etc. Amongst some of the key tasks before the SRO, Sa-Dhan will have to conduct investigations into areas of concern as pointed out by the RBI, including keeping the Central Bank informed of violations by any of its members.

About Sa-Dhan:

Sa-Dhan came into being on July 21, 1999 with a mission to build community development finance in India. It helps its member and associate institutions to better serve low-income households, particularly women, in both rural and urban India, in their quest for establishing stable livelihoods and improving quality of life.

Website: http://www.sa-dhan.net/

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