Initiated by Sophia Cramer, in coordination with Isabelle Guérin and Nithya Joseph, a group of 19 researchers and microfinance experts has called on the IFC to better integrate borrower-related risks into its Sustainability Framework and financial intermediary practices. The letter argues that current approaches insufficiently address the social harms linked to over-indebtedness — including repayment pressure, asset sales, reduced spending on food and healthcare, psychological distress, and debt-related suicides — despite IFC’s “do no harm” commitments.
Citing cases from India and Cambodia, the authors highlight a paradox whereby highly vulnerable borrowers are often treated as posing minimal social risk. They recommend explicitly recognizing borrowers as affected stakeholders, integrating over-indebtedness risks into due diligence and supervision, and strengthening borrower consultation and social risk monitoring beyond existing Client Protection Standards.