Principles of business activity


Principle 1: Insolvency prevention

Why is it important? Insolvency prevention should be the main rule of microfinancing as well as any other operation, which deals with lending of money. Financial institution should make sure that they do not issue a debt that a debtor cannot manage. Loan can be a problem if the access to it is considered a right and not a firm business decision for the debtor and as well as the institution.

Principle 2: Transparency of prices

Why is it important? Clear information are the basis of consumers protection, particularly when the level of financial literacy is low and when clients may not be in a position to make decisions on advantages and risks of financial products and services.

In practice, this principle means that providers of financial services take care of availability of the complete information for the clients in clear language without ambiguities which client can easily understand. The principle is covered by written and verbal communication before the point of sale (marketing), at the place of sale and after the sale (during all contacts with a buyer).

Fair price

Why is it important? Fair price, particularly in the market without competition, is a protection of consumers’ interests. However, consensus on fair prices does not exist. For GSA, fair price is defined as a care of the institution for a benefit of the consumer and its commitment to establish mutually beneficial relations between the institution and the client.

In practice, this means that the principle of financial institutions is not to charge a client for its own inefficiency; instead they favour long-term beneficial relation with the clients and not a short-term maximization of the profit.

Principle 3: Appropriate manner of collection

Why is it important? Collection of debts tests commitment of institutions to treat the clients with respect and dignity.

In practice, collection of debts in appropriate manner does not mean forgiveness of debt or flexibility in regard to the punctuality in timely repayment. Financial institution remains committed to this principle in a way that it maintains high standard of ethical behaviour even when it does not succeed to animate the client to fulfil his/her contracted commitments.

Principle 4: Ethical conduct of staff

Why is it important? Dealing with clients in respectful and dignified manner is the fundamental principle of consumers’ protection. The image of the institution is grounded in the conduct of its staff.

In practice: Financial institution gets to this principle upon the construction of the awareness on the significance of the corporate culture which values high ethical standards among staff and ensures existence of guarantees for prevention, identification and management of corruption or harassment of clients.

Principle 5: Mechanisms for objections and complaints settlement

Why is it important? Buyers should have an opportunity to communicate problems, to file a complaint when thighs go in the wrong direction and to expect timely resolution of their complaints.

In practice: Financial institution fulfils this principle with mechanisms for collection of complaints, timely reaction and resolution of the problems for its clients.

Principle 6: Privacy of clients’ data

Why is it important: Buyers have a right to expect that their personal and financial information is not revealed to those who are not authorized to see them.

In practice: Financial institutions are measured in regard to this principle by respecting the privacy of clients’ data, which ensures integrity and safety of clients’ data, and ask for client’s permission for exchange of information with the outsiders in advance.