Micro finance is a critical tool for low-income households to escape poverty and for micro enterprises to sustain their business. In Asia and the Pacific, the microfinance market has been growing backed by strong demand and intensive policy support.

However, growth with low credit discipline may encourage excessive credit supply and over-indebtedness of borrowers. For instance, lack of transparency in loan pricing and alleged abusive debt collection by microfinance institutions triggered a microfinance crisis in Andhra Pradesh, India, which raised its head in 2010.

Financial consumer protection is thus an essential ingredient to deliver quality and sustainable microfinance services.

Microfinance client protection has been drawing increasing attention from policymakers, regulators, microfinance service providers, borrowers, and civil societies, as well as global communities such as the G20.