SECP Introduces Consumer Protection Principles for Non-Banking Microfinance Companies

ISLAMABAD:TheSecurities and Exchange Commission of Pakistan (SECP)has introduced new Consumer Protection Principles for Non-Banking Microfinance Companies (NBMFCs), mandating the issuance of a Key Fact Statement (KFS) for borrowers to ensure transparency and consumer rights protection. In a recently issued Circular No. 5 of 2025, SECP has directed all NBMFCs and the Chief Executive Officer of Pakistan Microfinance Network to adhere to these principles. This initiative supplements existing regulations under Circular 24 of 2018 and Circular 08 of 2024 and aligns with the Women Equality in Finance policy for the non-banking microfinance sector. The newly introduced principles aim to enhance financial inclusion, promote transparency, and strengthen the relationship between consumers andmicrofinance institutions. The SECP has emphasized that consumers must be well-informed and treated fairly, with access to necessary financial tools and support for sound decision-making. NBMFCs are required to integrate the guiding principles outlined in Annexure-A of the circular into their operations. Among the key directives are: To enhance borrower awareness, NBMFCs must ensure the following disclosures: NBMFCs must ensure that staff are adequately trained to handle grievances and comply with the reporting requirements for gender-disaggregated data across all performance metrics and complaint records, as specified in Circular No. 03 of 2025. The SECP’s new directive underscores its commitment to protecting consumer rights and ensuring financial transparency within the non-banking microfinance sector. The move is expected to reinforce trust and accountability in the industry, benefiting both consumers and financial service providers.