SML has committed itself for adopting and implementing fair practices in all its activities and transactions with its members while providing microfinance loans.

Loan Proposals and their Processing
In the first step, every member who intends to access credit from the company has to complete the compulsory group training programme and Group Recognition Test organized by the company. This programme is conducted by the Field Credit Assistant (FCA) or a designated staff member, authorised by SML.

Primary data is collected in a prescribed format from borrower/member to comply with the KYC (Know your Customer) norms.

FCA should verify the loan application and completely fill the following information:
• Date of application
• Borrower identification particulars
• Loan product details
• Loan Amount
• Need for Loan
• Applicable interest rates
• Term of the Loan
• Repayment particulars
• Acceptance by the borrower’s family member / the relevant SHG members

The expected date of loan disbursement should be mentioned on the loan application form and to be intimated to the borrower / member.

Loan appraisal and Terms & conditions
FCA or designated staff of the Company should convey to the borrower/member the amount of loan sanctioned along with the terms and conditions including the annualized rate of interest and method of repayment of the loan.

Disbursement procedure of loans
Authorized staff of SML should verify the Loan application along with all securities, sureties and approvals, which is applicable as per the applicable policy of the company.
• Demand promissory Note
• Surety or guarantee
• SHG members/Group acceptance
• Family members’ acceptance
• Acceptance of the terms and conditions by the borrower/member for rate of interest, processing charges if any and repayment terms
Documentation for Hypothecation or charge creation or any security or surety/guarantee
• The acceptance letter
• Letter of confirmation of deposit of security documents

The Company keeps all the documents in the safe custody in the respective premises by the authorized persons.

Loan passbook has to be given to every borrower/member for each loan. The loan passbook contains the repayment schedule, effective interest rate and other processing charges etc.

The company gives prior notice of any change in the interest rate and other charges to the borrower / member.

The company takes a decision whether to recall / accelerate the payment or performance under the loan agreement / Promissory Note as agreed with the borrower/member under intimation.

General
The company does not interfere in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement unless the new information, not earlier disclosed by the borrower has come to the notice of the Company.

If there is any specific request from the borrower for transfer of borrower account, the consent or otherwise i.e. objection of the Company if any will be conveyed within 21 days from the date of receipt of request. Such transfer shall be as per transparent contractual terms in consonance with law.

The Company will not resort to undue harassment i.e. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans.

Grievance Redressal Mechanism
The Company will lay down the appropriate grievance redressal mechanism within the organisation to resolve the disputes arising in this regard. The Board of Directors periodically reviews the compliances of the Fair Practices Code and functioning of the grievances redressal mechanism at various levels of management.

Review of the compliance of the Fair Practice Code
The Chairman and Managing Director of the SHARE Microfin Limited will review the compliance of the Fair Practices Code and functioning of the grievances redressal mechanism once in a quarter. A report on the compliance of the Fair Practices Code and the functioning of the grievance redressal mechanism will be placed before the Board of Directors of the Company once in a year.