ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced the Consumer Protection Principles for the Non-Banking Microfinance Finance Companies (NBMFCs) with the direction to issue key fact statement (KFS) for their borrowers.
The SECP has issued a circular number 5 of 2025 to chief executive officers of all NBMFCs and chief executive officer, Pakistan Microfinance Network.
This is in addition to the requirements specified through Circular 24 of 2018 and Circular 08 of 2024, and in tandem with women equality in finance policy for the non-banking microfinance sector.
These principles aimed at ensuring that consumers are well-informed, treated fairly, and provided with the necessary tools and support to make sound financial decisions, while enhancing transparency, promoting financial inclusion and strengthening the overall relationship between consumers and non-banking microfinance companies.
The NBMFCs are hereby directed to comply with the specified requirements and are encouraged to integrate guiding principles into their operations as outlined in the detailed guiding document attached as Annexure-A.
The NBMFCs shall ensure clear communication and comprehensive descriptions of terms and conditions, and pricing of the financial products and services.
Before proceeding for loan disbursement, NBMFCs shall display a summary of key fact statement (KFS) to the borrower preferably in local language. The key fact statement shall be presented in a simple, clear and easily accessible format, the SECP said.
The loan contracts should be available in local language and a signed copy needs to be shared with the clients along with a signed copy to be kept in the records by the NBMFCs.
The terms and condition of the financing cannot be changed before the maturity of loan.
The NBMFCs shall ensure the following disclosures before proceeding for a loan disbursement: a) Fee Disclosure: Disclose all fees and charges associated with financial products in a clear and understandable manner during screening/formation, approval of loan, and time of disbursement. b) Total Cost of Credit: Clearly explain the total cost of credit, including Interest rates, fees, and any other charges. c) Risk Information: Clearly communicate the risks associated with each financial product and service; NBMFCs shall ensure that information is accessible through multiple channels, including in-person, online, and mobile platforms, and provided in various languages and formats to cater to a diverse client base.
The NBMFCs shall ensure that staff are trained in handling grievance redressal appropriately and also ensure the submission reporting of gender disaggregated data across all metrics and complaints data as specified through Circular No03 of 2025, the SECP added.
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced the Consumer Protection Principles for the Non-Banking Microfinance Finance Companies (NBMFCs) with the direction to issue key fact statement (KFS) for their borrowers.
The SECP has issued a circular number 5 of 2025 to chief executive officers of all NBMFCs and chief executive officer, Pakistan Microfinance Network.
This is in addition to the requirements specified through Circular 24 of 2018 and Circular 08 of 2024, and in tandem with women equality in finance policy for the non-banking microfinance sector.
These principles aimed at ensuring that consumers are well-informed, treated fairly, and provided with the necessary tools and support to make sound financial decisions, while enhancing transparency, promoting financial inclusion and strengthening the overall relationship between consumers and non-banking microfinance companies.
The NBMFCs are hereby directed to comply with the specified requirements and are encouraged to integrate guiding principles into their operations as outlined in the detailed guiding document attached as Annexure-A.
The NBMFCs shall ensure clear communication and comprehensive descriptions of terms and conditions, and pricing of the financial products and services.
Before proceeding for loan disbursement, NBMFCs shall display a summary of key fact statement (KFS) to the borrower preferably in local language. The key fact statement shall be presented in a simple, clear and easily accessible format, the SECP said.
The loan contracts should be available in local language and a signed copy needs to be shared with the clients along with a signed copy to be kept in the records by the NBMFCs.
The terms and condition of the financing cannot be changed before the maturity of loan.
The NBMFCs shall ensure the following disclosures before proceeding for a loan disbursement: a) Fee Disclosure: Disclose all fees and charges associated with financial products in a clear and understandable manner during screening/formation, approval of loan, and time of disbursement. b) Total Cost of Credit: Clearly explain the total cost of credit, including Interest rates, fees, and any other charges. c) Risk Information: Clearly communicate the risks associated with each financial product and service; NBMFCs shall ensure that information is accessible through multiple channels, including in-person, online, and mobile platforms, and provided in various languages and formats to cater to a diverse client base.
The NBMFCs shall ensure that staff are trained in handling grievance redressal appropriately and also ensure the submission reporting of gender disaggregated data across all metrics and complaints data as specified through Circular No03 of 2025, the SECP added.
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