March 16, 2017

To our stakeholders:

I am pleased to confirm that Credo reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to sharing this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Zaal Pirtskhelava

CEO

Credo has implemented policies which covers all main Human Rights clauses. The policies are approved by our Senior Management Team or Supervisory Board members and is implemented within whole company.

The purpose of this Code is to confirm the Company's commitment to conduct its affairs in accordance with the highest standards of integrity and in compliance with all applicable laws, rules and regulations. The Company’s success greatly depends upon adherence of its employees to sound business principles, their compliance with applicable laws, rules and regulations, and their dedication to high ethical business standards. Credo conducts its business honestly and ethically wherever we operate in the country. We will constantly improve the quality of our services, products and operations and will create and maintain a reputation for honesty, fairness, respect, responsibility, integrity, trust and sound business judgment.
Code of Conduct covers employee responsibilities and prohibitions, client rights, confidentiality and privacy issues, intellectual and material asset protection, anti-discrimination and conflict of interest clauses and etc.

Credo has obtained SMART Campaign Client Protection Certificate in 2016. Client Protection Certificate granted by the Smart Campaign is a recognition issued to Credo that shows the company is in compliance with the following seven principles:
1. Appropriate product design and delivery
2. Prevention of over-indebtedness
3. Transparency
4. Responsible pricing
5. Fair and respectful treatment of clients
6. Privacy of client data
7. Mechanisms for complaint resolution

Credo implemented a new complain mechanism in 2016 that intentionally makes sure complaints do not have to go through front line staff, because it relies on the institution's website, Facebook page and the new unique call center number for all branch offices.
The updated Customer Service Standards for field staff includes clear reference to the call center number that should be provided to clients during the explanation of the complaints channels, information regarding the number is also provided on posters, brochures and etc, which are placed in the branches.

Credo conducts surveys among our clients and staff as well in order to have full picture if any human rights are violated or not: client satisfaction surveys, employee satisfaction surveys. A comprehensive report is designed to aggregate monthly results of the complaint received. The report is prepared by the Environmental and Social Performance Manager and shared with the Management team to identify suggestions for improvement in case of shortcomings. Complaint and grievance are segregated by branch and region. A summary report of the main reasons for complaint is also available.

The complex process of Credo’s assessment regarding the Client Protection Certification had been conducted by the independent international rating agency Microfinanza Rating. Certificate is valid for four years, but Company shall be assessed regarding those principles after two years.

Credo HR policies are in accordance with the Georgian Labor Code and in most cases are considered as best practice in the country.
Credo does not discriminate on the basis of nationality, race, skin color, language, ethical and social belonging, tribe, property and status, place of living, age, gender, sexual orientation, disability, religion, societal, political, marital status, political or other views.
Minimum working age in Credo is in accordance with Georgian Labor Code.

Credo does not restrict its workers from developing a legally permissible means of expressing their grievances and protecting their rights regarding working conditions and terms of employment. An internal grievance system is in place and is regulated by the policy.
Salary for each individual employee is determined by the salary grade of an employee, his/her education, experience, skills and competences, while salary increase is dependent on efficiency of a particular employee. Efficiency of employee and related salary increase or promotion is managed through annual performance appraisal system. Performance management is based on Management By Objectives (MBO) methodology, where for each employee annual SMART goals are set at the beginning of year, reviewed mid-year and evaluated at the end of the appraisal period. Employee salary decisions are based on performance appraisal score.
Employees have equal opportunities no matter of the gender or any additional discriminating issues. Credo has special Job Matrix maps.

50% of Credo employees are women.
Their is no salary difference between men and women as position is based on special job matrix which covers position's min and max salaries.

Credo is committed to social and environmental (S&E) sustainability. This commitment is based on Credo’s mission to provide sustainable financial services to the poor and Georgian micro and small businesses, with a preference for rural activities and those businesses that create income and employment opportunities for the poor. In order to reflect the commitment to social and environmental sustainability, Credo developed a Social and Environmental Performance Policy based on international best practice.
Credo has Exclusion List- List of Businesses which are not able to use Credo services in order to mitigate environmental and social risks.
There is a dedicated person. Environmental and Social Performance Manager is responsible for environmental and social issues.

Credo ensures environmental and social adequateness of all businesses it supports, through checking customer compliance of all business activities to Environment and Social national legislation and exclusion list. The reason of not financing businesses listed in exclusion list ranges from economic reasons to health and cultural concerns that will lead to serious environmental and social risks. Clients who have businesses listed in exclusion list are not able to use Credo services.
Credo has implemented system for identification of Environmental and Social Risk Categorization, which is based on three criteria: Loan Amount, Tenure and Industry Risk Category. If Client's business has Medium or High Risks additional evaluation forms are filled in order to mitigate the risks.
Environmental and social aspects are the part of the orientation training, which is conducted to all newly hired staff. Also when environmental and social management system was introduced, ESMS was conducted to all existing staff.

The Environmental and Social Performance Manager prepares Credo’s Annual Environmental and Social Performance Report to shareholders and lenders within 120 days of each calendar year.
The report includes data and analysis on environmental and social risk associated with Credo’s loan portfolio and Credo’s performance in the implementation of this policy. It follows standard reporting themes and categories required by shareholders and lenders.
Compliance is checked by Internal Audit Team

Anti-corruption clauses are the part of Operations Policy
No forms of corruption or fraud is welcomed in the company, therefor there is special disciplinary measures policies as well.

Credo Management is responsible to ensure that there are no corruption or fraud cases and is the part of Credo Operations Policy. Systematic monitoring of subordinates, in order to identify any kind of problems on time.
Credo internal audit team permanently checks Credo departments.

Identification and checking of problems is described in Credo Operations Policy.
Internal Audit Team checks the departments in case of risk identification