CAC to Begin Consultations on Draft Microcredit Code of Conduct This September

The Consumer Affairs Commission (CAC) will begin consultations this September on the draft Code of Conduct for microcredit institutions.

The Code will govern microcredit licencees’ conduct in consumer-related matters, addressing issues such as predatory lending and unethical practices within the sector.

It will also outline minimum customer service standards to ensure transparency, fairness, and accountability across the industry.

Chief Executive Officer (CEO) of the CAC, Dolsie Allen, told JIS News that the Code of Conduct will foster a transparent, ethical, and responsible microcredit sector – one that protects borrowers and strengthens the industry as a whole.

She noted that the CAC has been designated under the Microcredit Act as the agency responsible for investigating and resolving complaints brought by consumers against microcredit institutions.

The Act, which came into effect July 2021, aims to bring structure and accountability to the microcredit sector.

“One of the responsibilities that we have in handling complaints is to… create a Code of Conduct for the micro credit institutions. We have the draft in place, and we have [already received] feedback from [several stakeholders] in the industry.

“We are going to be putting [the draft] on our website, and we are inviting [other] persons to give us their feedback if there are areas that they think we have left out that will affect our consumers,” the CEO stated.

Mrs. Allen said feedback is welcomed from all stakeholders across the microcredit sector.

“From the institutions themselves as well as their clients, we are inviting feedback just to ensure that we are being fair to these businesses and, at the same time, we are protecting the consumers,” she emphasised, adding that, thereafter, “we are going to be having some consultations sometime in September”.

Mrs. Allen emphasised that heightened regulation is especially important, given the exponential growth of the microcredit sector and the emergence of deceptive lending practices.

“Micro credit institutions [have] become very prolific now. A lot of persons are in that type of business, and they are actually filling a gap that has been created by the financial institutions. They play a very vital role, but we know that there are issues,” she noted.

The microcredit sector is regulated by the Bank of Jamaica (BOJ), which serves as the administrator of the Microcredit Act and is responsible for licensing and supervising microcredit institutions.