European Code of Good Conduct: Discussion Note

This note takes a critical view of the structure of Code of Good Conduct for Microcredit Providers in the EU (the “Code”), and the challenges in the implementation of the Code in practice. Conceived as quasi-regulation effort to streamline the operational standards of microfinance institutions in the European Union (EU), the Code met with resistance on the part of the microfinance institutions in relation to certain clauses which may conflict with the local laws, or put the organization in an uncompetitive market position.

The motivation for this communication from the two leading microfinance networks in the EU – the Microfinance Centre (MFC) and European Microfinance Network (EMN) – is to bring forth the feedback from the field on the Code of Good Conduct for Microcredit Providers in the EU, and to propose actionable steps, which in the view of the industry, would maintain transparency within the microcredit sector while stimulating innovation and growth.