Microfinance Focus, October 15, 2011: The European Commission has recently published a European Code of Good Conduct for microcredit provision. This Code provides recommendations and standards that aim to foster best practice in the microcredit sector. It is intended to provide guidance for microcredit providers from the point of view of consumers, investors, funders and regulators.

By setting out good practice guidelines and identifying expectations and common principles, the Commission is seeking to support the microcredit sector in facing the challenges of accessing long term finance, maintaining and raising the quality of services and moving towards sustainability.

Organised in a practical way, this voluntary Code of Good Conduct is divided into five indexed sections addressing customer and investor relations, governance, common reporting standards, management information systems and risk management.

A sixth section on Social performance, covering ethical and social aspects, will be added to the document in 2012.

The European Code of Good Conduct was designed in the framework of JASMINE, a pilot project developed in the aftermath of a Communication on microcredit adopted by the Commission in November 2007 and also feeds on work carried out previously on the regulation of microcredit in Europe

The Code has been developed in close consultation with many stakeholders of the microcredit sector in the EU. Representatives of the banking and non-banking sector such as academics, funders, investors, customers, owners, regulators and partner organisations were involved in this project.