The microfinance industry is looking to expand its own list of dos and don’ts that it will follow in its operations.

The Code of Responsible Lending for the microfinance industry could be further widened to improve transparency to the borrowers and lenders.

The two self regulatory organisations for the industry — MFIN (Microfinance Institutions Network) and Sa-Dhan — had last year announced the responsible lending code, which specified certain guidelines for the lending institutions.

Not more than three lenders can offer credit to the same borrower, the code said. The overall outstanding of the borrower should not be more than Rs 1.25 lakh. Also, there should not be any fresh lending to a borrower without an updated credit bureau report.

According to Manoj Nambiar, managing director of Arohan Financial Services and chairperson of the MFIN board, two more measures are under discussion to be added to the code this year.

This includes looking at the financial situation of the entire household and not just the individual borrower and keeping a record of the field staff.

Nambiar said the code has been signed by 110 entities. It is a key initiative for the sector and the overall adherence levels to the code are set to rise.