Policies & Practices

Credit Service

  • Code of Conduct

  • Fair Practice Code

  • Client Grievance Redressal

  • Interest Rate Policy for the year 2022-23

Code of Conduct

  1. Preamble

This Code of Conduct (CoC) aims at promoting and advancing ‘responsible lending’ practices in our business. Ensuring the clients’ interests and prioritized and protected, improve the client’s well-being as well as to ensure the well-being and security of employees. Being the member of Sa-Dhan, We fellow the code of conduct and core values per the Reserve Bank of India and Self-Regulatory Bodies – Sa-Dhan & MFIN.

   2.  Objective 

  • Lay down a set of comprehensive guidelines with respect to Code of Conduct
  • The Code of Conduct aims at promoting and advancing “Responsible lending’ practices in the organization.
  • The organization take greater responsibility to ensure that clients’ interest are protected 

   3.  Scope

This Code will apply to all employees to conduct its day-to-day business activities. This Code applies to the following activities undertaken by WeGrow:

  • Providing financial services to clients, individually or in groups.
  • Recovery of credit provided to clients
  • Providing insurance, pension services and remittance services, or any other related products and services.
  • Livelihood promotion services and business development services including marketing of products or services made or extended by the eligible clients or for any other purpose for the welfare and benefit of clients.
  • Finance Plus services such as health, financial literacy, vocational training etc.

Code of Conduct

1. Clients Engagement

    a. Fair Interaction

  1. We must ensure that customer is not unfairly discriminated against on grounds such as religion, caste and marital status and sexual orientation etc.
  2. We always use respectful language, maintain decorum and are respectful to social and cultural sensitivities
  3. We do not use coercion of any sort to make recovery of loans and take recovery only at a central designated place. Employee take recovery at the place  of residence or work of the customer only if customer fails to appear at central designated place on two or more successive occasions.
  4. We do not intimidate or humiliate verbally or physically.
  5. We do not contact customers at odd hours or at inappropriate times such as bereavements, illness, social occasions such as marriages and births

    b. Suitability (avoid multiple/over-lending) 

  1. We must assess customer’s financial situation (income and expenses), credit requirement, repayment capacity and indebtedness based on information from the customer, Credit Information Report (CIR) and field level intelligence before disbursing a loan.
  2. We must use a valid 3 CIR before sanctioning any loan. It is clarified that CIR must be used before disbursing all loans including small value top-up loans, second and subsequent cycle loans.
  3. Prior to sanctioning of loans , we must ensure that:
  4. We do not become the fourth lender to a client if the client has active loans from three (3) different Providers. We also ensure that not more than 2 NBFC-MFIs lend to a customer.
  5. We do not breach the total indebtedness of Rs 1,25,000 per customer.
  6. We do not sanction/disburse a loan to client who has non-performing (delinquency > 90 days) accounts with loan amount outstanding >Rs 1,000 with another Provider.

    c. Education &Transparency 

  1. We must provide the key information to the client and include them in the loan documents such as loan application, loan sanction letter/loan agreement and loan card. This must include:
  • Identity and address of our Company.
  • Identify and address of the client.
  • Product details (loan amount, tenure, repayment frequency, annualized interest rate on reducing balance method, processing fee, any other charges or fees howsoever described, total amount payable, total charges recovered towards premium of credit- linked life insurance cover, coverage amount and risks covered, if applicable and other key terms and conditions).
  1. Details of client grievance redressal system
  • We must communicate all the terms and conditions to clients in the official regional language or language understood by them.
  • We must provide a receipt for every payment received from the customer.
  • We must take measures (such as training, assessment and periodic interactions with clients) to ensure that clients fully understands the products, process and terms of the contract.
  • We must give emphasis in educating clients on the importance of timely repayment for good credit history with CICs, benefit, risks and necessary safeguards of digital financial transactions and grievance redressal mechanism including internal and external escalation mechanism.
  • We must educate clients about blind trust with group and center leader and how any default in the fictitious loan (also referred to as ghost lending /pipelining taken by group/center leader in client’s name) can ruin her credit records and access to credit in future. This should be part of Compulsory Group Training (CGT)/Group Recognition Test (GRT) process. We should ensure clients’ attendance in the group meetings.

    d. Information & Privacy 

  1. We should obtain copies of KYC documents from clients as per RBI norms.
  2. We should upload accurate and comprehensive client data with all RBI approved CICs as per Uniform Credit Data Format on weekly basis.
  3. We must promptly address any dispute raised by the client about her data with CICs within 7 calendar days from receipt of such dispute.
  4. We must keep personal client information strictly confidential. The client information may be disclosed to a third-party subject to any of the following conditions:
  5. Such information is required to be provided under the law or it is provided for a mandated business purpose (for example, to credit information companies).
  6. Client has been informed about such disclosure and prior permission has been obtained in writing.
  7. We must take client’s consent for loan application, checking her CIR and accepting terms and conditions of loan. For every product availed by client, credits as well as insurance or any other product, separate and explicit customer consent should be taken.

    e. Grievance Redressal 

  1. We must provide a robust Client Grievance Redressal system to address client complaints in an effective and timely manner. We should provide an easy access to Client Grievance Redressal Mechanism (CGRM) to all clients through a dedicated a toll-free phone number and staff assisted procedure at the branch to register customer grievances.
  2. We must clearly communicate the details of client grievance redressal in branches, loan documents and other communication materials.
  3. We must have least one Grievance Redressal Officer to over-see the CGRM and make his/her contact details (e-mail, phone number) accessible to customers.
  4. We must assure the client that she will be treated fairly despite the grievance being lodged.

    f. Others 

  1. We should disclose all necessary details about offering credit-linked life insurance to client.
  2. If we withdrawing operations from an area, must make alternate arrangement to service the existing loans of the clients.
  3. We must establish direct contact with the clients, avoiding influential unscrupulous intermediaries amongst group leaders. We regularly rotate group leaders to restrain the disproportional influence of leaders in the group.

2. Employee Engagement

    a. Recruitment 

  1. We must not unfairly discriminate against a candidate for recruitment based on gender, religion, caste, marital status or sexual orientation etc.
  2. We must select candidates based on merit, ethics and integrity.
  3. We must recruit a candidate from other employer based on satisfactory relieving letter or reference check only. We must seek reference check from candidate’s current employer only after an offer letter is issued to the candidate. However, if request for reference check is not responded to within 15 calendar days (from date of sending the request), we may go ahead with the recruitment.
  4. We must respond to request from the other employer for reference check with 15 calendar days form receipt of such communication.
  5. We may participate in Employee Bureau to submit our employees’ data and check candidate’s employment records.
    1. If we recruit from other employer, must honour the notice period as mutually agreed between prospective employee and her/his current employer.
    2. If we recruit an employee up to the position of Area Manager from other Provider, should preferably position such employee at least 50 km away from location of her/his last posting (i.e. location of branch where employee was last posted) for a year. The fundamental spirit behind this clause is to ensure that an employee does not encroach upon the business of Provider (where she/he was last employed) by virtue of her/him being privy to business information of  the area and familiarity with the clients from last employment.

    b. Orientation (Training & Appraisal)

  1. We must give comprehensive induction training to the employees on policies, process, regulations, as well as Code of Conduct. Emphasis should be given on client-interface aspect such as fair treatment, credit assessment, privacy of data, service quality, CGRM, relationship management and dealing with client facing difficulty in repayment etc.
  2. We must regularly assess employees’ understanding of the above elements and conduct refresher training to address the gaps in understanding.
  3. We must train our employees on understanding and dealing with gender issues including appropriate interaction with women colleagues and clients.
  4. We must orient our employees on professional conduct and integrity issues including expected behavior and not indulging in any unlawful and anti-social activities.
  5. We must ensure that employees directly responsible for CGRM receive detailed training about the system, processes and soft skills for resolving the complaints.
  6. We must institute a transparent incentive and appraisal structure in such a way that it does not lead to perverse sales behavior, factors for the service quality, incentivizes responsible lending, rewards compliance with the CoC and penalizes breach of CoC.
  7. We must set targets for the branch-level employees based on a reasonable-objective criterion including understanding of micro-credit requirement and repayment capacity in an area.

    c. Well Being

  1. We must ensure the well-being (for example, adequate remuneration, working hours, working conditions, leaves for personal reasons such as family commitments and emergencies) and security of employee is given due importance.
  2. We must have well-defined protocol to be followed by employee to handle risks arising from going to difficult area and cash-handling. We must indemnity the employees for cases where protocol has been followed but mishap still occurred.

Fair Practice Code

I.Introduction

Over the last two decades, the micro-credit sector has successfully mainstreamed itself as a key delivery channel to provide credit to low-income households. Currently a wide range of Providers such as NBFC-MFIs, Banks, SFBs, NBFCs and Non-profit/Section 8 MFIs, under different regulatory framework, provide micro-credit to over 4 crore customers from low-income households.

A microfinance customer as defined by the RBI (for NBFC-MFIs) is a person with an annual household income of Rs 3.00 Lakh in India. One fundamental challenge for the micro-credit sector today is that microfinance customer is served by differently regulated entities. With the multiplicity of sources of credit to the microfinance customers, safeguarding the interests of low-income-customers, who are generally quite vulnerable, is becoming increasingly challenging. Clearly, uniform rules across the Providers, on customer-centric issues such as transparency and multiple/over-lending are important to ensure that power of micro-credit can reach its intended objectives in a responsible and nurturing way.

For this purpose, a meeting of all Providers of micro-credit was called to agree and adopt a uniform- common code for customer-conduct in micro-credit. This code is titled ‘Code for Responsible Lending (CRL) in Micro-credit’.

This document defines the elements of Code for Responsible Lending (CRL) which is sector specific and entity agnostic. Building on key regulatory customer-protection measures as described in RBI Master Directions for NBFC-MFIs, RBI Fair Practice Code for Banks and NBFCs, Industry Code of Conduct and RBI Charter of Customer’s Rights in the context of micro-credit sector, CRL includes most critical elements which are required to be adopted by Providers while delivering micro-credit loan.

This code is applicable to unsecured micro-credit loans given under individually or group liability to microfinance segment by all Providers.

 

II.      Code

This code applies to the delivery of micro-credit to customers, individually or in groups either on its own or through an agent by Providers. Code has five elements:

  1. a.       Fair Interaction
  2. b.       Suitability
  3. c.       Education & Transparency
  4. d.       Information & Privacy
  5. e.       Grievance Redressal

 

  1. a.      Fair Interaction 
    1. Provider must ensure that customer is not unfairly discriminated against on grounds such as religion, caste, marital status and sexual orientation.
    2. Provider must ensure that all employees and persons acting on its behalf.
  • Use respectful language, maintain decorum and are respectful of social and cultural sensitives
  • Do not use coercion of any sort to make recovery of loans
  • Do not intimidate or humiliate verbally or physically
    • Do not contact customers at odd hours or at inappropriate times such as bereavements, illness, social occasions such as marriages and births

 

  1. b.     Suitability (avoiding multiple/over lending) 
    1. Provider must assess customer’s financial situation (income and expenses), credit requirement, repayment capacity and indebtedness based on information from the customer, Credit Information Report (CIR) and/or field level intelligence before disbursing a loan.
    2. Provider must use a valid CIR before sanctioning any loan. It is clarified that CIR must be used before disbursing all loans including small value top-up loans, second and subsequent cycle loans.
    3. Provider must disburse the loan commensurate with the customer’s ability to repay. While disbursing a loan, Provider must ensure that:
  • It does not become the fourth lender to a customer if a customer has active loans from three

(3) different Providers (entity agnostic). NBFC-MFIs are additionally required to ensure that not more than 2 NBFC-MFIs lend to a customer. Provider must verify the lender count (i.e. number of Provider) to the customer using a valid CIR prior to sanction of the loan.

  • It does not breach the total indebtedness of Rs 125,000 per customer. Provider must verify the total indebtedness to customer factoring un-secured microfinance loans (individual as well as group) captured in the microfinance section of the Credit Information Report (prior to sanctioning of the loan).
  • It does not sanction/disburse a loan to customer who has non-performing (delinquency > dpd 90 days) accounts with loan amount outstanding > Rs 1,000 with another Provider.

 

  1. c.      Education & Transparency 
    1. Provider must provide the key information to the customer and include them in the loan documents such as loan application, loan sanction letter/loan agreement and loan card. This must include:
  • Identity and address of the company
  • Identify and address of the customer
  • Product details (loan amount, tenure, repayment frequency, annualised interest rate on reducing balance method, processing fee, any other charges or fees howsoever described, total amount payable, total charges recovered towards premium of credit-linked life insurance cover, coverage amount and risks covered, if applicable and other key terms and conditions)
  • Details of customer grievance redressal system
  1. We must communicate all the terms and conditions to customers in the official regional language or a language understood by them.
  2. We must provide a receipt for every payment received from the customer.
  3. We must take measures (such as training, assessment and periodic interactions with customers) to ensure that customers fully understand the products, process and terms of the contract.

 

  1. d.     Information & Privacy 
    1. Provider must obtain copies of KYC documents from customers as per RBI norms.
    2. Providers must upload accurate and comprehensive customer data with all RBI approved Credit

Information Companies’ (CICs) as per Uniform Credit Data Format on a weekly basis.

  1. Provider must promptly address any dispute raised by the customer about her data with CICs.
  2. Provider must keep personal customer information strictly confidential. Customer information may be disclosed to a third-party subject to any of the following conditions:
  • Such information is required to be provided under the law or it is provided for a mandated business purpose (for example, to credit information companies)
  • Customer has been informed about such disclosure and prior permission has been obtained in writing
  • The party in question has been authorized by the customer with intimation to the Provider to obtain customer information.
  1. e.      Grievance Redressal 
    1. Providers must provide a robust customer grievance redressal system to address customer complaints in an effective and timely manner.
    2. Providers must clearly communicate the details of customer grievance redressal in branches, loan documents and other communication materials.

Disclosures in loan agreement / loan card

(a) All NBFC-MFIs shall have a Board approved, standard form of loan agreement. The loan agreement shall preferably be in vernacular language.

(b) In the loan agreement the following shall be disclosed:

       I.        all the terms and conditions of the loan,

      II.        that the pricing of the loan involves only three components viz; the interest charge, the           processing charge and the insurance premium (which includes the administrative charges in     respect thereof),

    III.        that there will be no penalty charged on delayed payment,

     IV.        that no Security Deposit / Margin is being collected from the borrower,

      V.        that the borrower cannot be a member of more than one SHG / JLG,

     VI.        the moratorium period between the grant of the loan and the due date of the repayment of      the first instalment(as guided by the NBFC-MFIs(Reserve Bank) Directions, 2011),

      VII.        an assurance that the privacy of borrower data will be respected.

(c) The loan card should reflect the following details as specified in the Non-Banking Financial Company - Micro Finance Institutions (Reserve Bank) Directions, 2011:

         I.        the effective rate of interest charged,

        II.        all other terms and conditions attached to the loan,

      III.        information which adequately identifies the borrower and acknowledgements by the NBFC- MFI  of all repayments including instalments received and the final discharge,

      IV.        The loan card should prominently mention the grievance redressal system set up by the MFI and also the name and contact number of the nodal officer,

  V.        Non-credit products issued shall be with full consent of the borrowers and fee structure shall be communicated in the loan card itself,

   VI.        All entries in the Loan Card should be in the vernacular language.

 

Non-Coercive Methods of Recovery

  • Recovery should be based on good manners, impartial treatment and persuasion.
  • Even defaulters shall be treated with respect and dignity.
  • No harsh language will be used even with the default borrower.
  • Recovery of loans should normally be made only at group meetings.
  • Recovery may be allowed at the place of residence or workplace of the borrower only when she fails to attend at group meeting.
  • In no circumstances, any borrower can be met at her residence or workplace before Sunrise and after Sunset.
  • If there is a genuine reason for non-payment/ delayed payment, appropriate measures for the repayment will be discussed with borrower and implemented with borrowers' consent.
  • Credit Officer will patiently explain the procedures and need for timely repayment of loan in a polite manner.

Client Grievance Redressal

Overview: 

WeGrow being a financial service provider to the under-financed and the under-privileged sections of society, believes that client-servicing is the most important tool for sustained business growth. Organisation’s Grievance Redressal Policy articulates our objective to minimize instances that give rise to customer complaints and create a review mechanism to ensure consistently superior service behavior. The objective of the Grievance Redressal Mechanism is to provide clients with a convenient, simple, low cost and effective process for settlement of individual grievances. For the purpose of the policy, ‘Grievances’ means individual client grievance and includes all the matters related thereto.

Objective: 

The objective of the policy is to ensure that:

  • All customers are treated respectfully, fairly and without bias at all times.
  • All issues raised by customers are dealt with courtesy, efficiency and are resolved in a timely manner.
  • Customers are made aware of their rights so that they can seek alternative remedies if they are not fully satisfied with our response or resolution of their complaint.
  • All employees will work in good faith with and without prejudice to the interest of the customers.

Registration of Complaints

In case of any complaints/grievances/disputes/quires, the customers can make use of the following Grievance Redressal Mechanism at various levels.

Level-I (At the Branch) 

  • The customers can speak to respective officials for resolution of their issues
  • Register their grievance through the complaint book available in physical form.
  • They can drop their written complaint/grievance into Complaint Box which is kept in the prominent place of the branch office.
  • The customers can call phone numbers of local Branch Manager and Area Manager which are mentioned in Group Resolution Book for resolution of their issues.

 

 

Level-II (At Head Office) 

If the customer is not satisfied with the response received from the branch or if the customer er doesn’t receive a response in 2 working days, they can call over the Help Desk Representatives available on the phone or write an email to the below mentioned e-mail id or post on Website to register their complaints.

Toll-Free Helpline Number: 1800 123 267 267 (Toll Free)

(Which is written on passbook)

Timing:  10 a.m. to 5 p.m. except Holiday, Sundays, 2nd and 4th Saturday of every month

E-mail: support@wegrowindia.com

Website: www.wegrowindia.com

Level-III (At Head Office) 

If the customer is not satisfied with the response from customer service helpdesk or if the customer does not receive a response within 3 working days, they can call or write to the Chief Grievance Redressal officer. The customer will receive a response within 5 working days from the receipt of the complaint by the Chief Grievance Redressal Officer.

Contact Details of the Chief Grievance Redressal Officer:

Mr. Santanu Sengupta

Chief Grievance Redressal Officer

WeGrow Financial Services Private Limited

AE- 601, Ground Floor

Sector -1, Salt Lake City

Kolkata- 700064

Contact number: +91 9123099713

E-mail: santanuwegrow@gmail.com 

Level-IV (SRO) 

If the complaint is not resolved by within 15 working days, the customer can call the Toll free number or write to Sa-Dhan which is an Independent body recognized as Self-Regulatory Organisation (SRO) by the Reserve Bank of India to redress customer complaints.

         Toll Free Helpline Number - +91 11 47174400

 

Level-V (RBI) 

If the complaint is not redressed within 30 days, the customer may appeal to the officer-in-charge of the Department of Non-Banking Supervision (DNBS) of the Reserve Bank of India, Kolkata at the following address.

Reserve Bank of India

Department of Non-Banking Supervision

5th Floor, 15 Netaji Subhas Road,

Kolkata – 700 001

Tel : 033 22303299

Portal : https://www.rbi.org.in/scripts/complaints.aspx

 

Categories of Customer’s communications with WeGrow

Query 

These may be general inquires, primarily relating to loans, interest rates, repayment terms, eligibility norms etc. 

Request 

Requests for obtaining any valid services for financing or refinancing support. 

Grievance 

Express dissatisfaction because of lack of action, inadequate quality of services 

Grave/ urgent Grievance 

Related to staff misbehavior, cheating/fraud, false commitments, miss-conduct with the customers. 

Suggestion/ Feedback 

Related to functions/ roles with respect to operations, policies or practices. 

 

 

Resolution of Complaints:

 

Timeframe:

  1. The complaints will be analyzed from all possible angles. Complaints shall be resolved in a proper and time bound manner as per following defined turnaround time for categories of grievances:

 

Level

Responsible Officer

No. of working days

Branch

Area Manager/ Branch Manager

2 days

Customer Service Help Desk

Officer at Help Desk

3days

Grievance Cell

Grievance Redressal Officer

5 days

 

  1. There may be some complaints which require deeper analysis from all possible angles which may cause delayed resolution of the complaint. In such cases, WeGrow will try to resolve grievances at the earliest depending on the nature of the case. Such delay in addressing the complaint beyond the prescribed time limit shall be conveyed to the complainant along with reasons for the same.

 

  1. If the resolution of the complaint is delayed beyond 15 days of receipt, or the complainant is not satisfied with the reasons of delay conveyed to her, she may call to the Toll free number or write to Sa-Dhan which is an Independent body recognized as Self-Regulatory Organisation (SRO) by the Reserve Bank of India to redress customer complaints.

 

  1. If the complaint is not redressed within 30 days, the customer may appeal to the officer-in-charge of the Department of Non-Banking Supervision (DNBS) of the Reserve Bank of India, Kolkata at the afore mentioned address.

Interaction with Customers:

  • Customer’s expectations/ requirements/ grievances can be better appreciated through personal interaction with customers and publicity of grievance redressal machinery by placing them on website/ branch offices.
  • Higher authority, Area Manager and Branch Manager are required to make surprise visits to meet customers and seek feedback about our work and field staff behaviour for continuous improvement and to record grievance if any.
  • Internal Audit should check if all complaints are appropriately registered, handled, and resolved, adherence to TAT, degree of satisfaction with the resolution provided as reported by customers.

 

Reporting to Board of Directors

Summary of the customer grievance reports along with actions initiated would be reported to the Board at least twice in a year.

The Report shall contain information like the total no. of complaints received, disposed of and pending, with reason thereof, which will be placed before the Board for information/ guidance.

Mandatory display at the offices

WeGrow shall ensure to display the following information prominently, for the benefit of its customers, at its places of business:

  • Name and contact details (Telephone, mobile nos. email address) of the Grievance Redressal Officer who can be approached by the customer for resolution of complaints against WeGrow.
  • Toll free Number and e-mail address of Head Office.
  • Details of mailing address with phone number and e-mail address of Chief Grievance Officer at Head Office.
  • Toll free Number and e-mail address of Sa-Dhan
  • Details of mailing address of Officer -in-Charge of the Regional Office of Department of Non-Banking Supervision (DNBS) of RBI, Kolkata.

Sensitizing operating staff for improvement in service and handling complaints

It is very important to sensitize our staff to handle customer complaints/ grievance with courtesy, empathy and promptness. WeGrow conduct training programmes regularly for staff on customer services and minimizing grievances. It will be our constant endeavor to keep our staff committed to fair behavior and ethical practices at all point of time.

Interest Rate Policy for the year 2022-23

In accordance with RBI circular, vide RBI/DOR/2021-22/89 DoR.FIN.REC.95/03.10.038/2021-22 on 14th March, 2022 and further notifications (if any) issued by Reserve Bank of India in this regard; all Entities have to ensure complying with the Master Direction – Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022 and ‘pricing guidelines’, to be eligible to classify these loans as priority sector loans.

1. Defination of Microfinance Loans:

1.   A microfinance loan is defined as a collateral-free loan given to a household having annual household income up to ₹3,00,000. For this purpose, the household shall mean an individual family unit, i.e., husband, wife and their unmarried children.

2.   All collateral-free loans, irrespective of end use and mode of application/ processing/ disbursal (either through physical or digital channels), provided to low-income households, i.e., households having annual income up to ₹3,00,000, shall be considered as microfinance loans.

3.  To ensure collateral-free nature of the microfinance loan, the loan shall not be linked with a lien on the deposit account of the borrower.

4.  The REs shall have a board-approved policy to provide the flexibility of repayment periodicity on microfinance loans as per borrowers’ requirement.

 

2.  Pricing of Loans

  1. A well-documented interest rate model/ approach for arriving at the all-inclusive interest rate;

  2. Delineation of the components of the interest rate such as cost of funds, risk premium and margin, etc. in terms of the quantum of each component based on objective parameters;

  3. The range of spread of each component for a given category of borrowers; and

  4. A ceiling on the interest rate and all other charges applicable to the microfinance loans.