Client Protection: Are we there
Yet? The State of Practice, 2011
European Microfinance Week
November 3, 2011
Isabelle Barrès
www.smartcampaign.org
contact@e-mfp.eu
www.e-mfp.eu
Timeline of the Smart Campaign
2011
2009
2008-2009
• Principles
updated to 7
Principles
• October: Smart
• Certification
Campaign
officially launched Program
• Center for Financial
Inclusion’s Beyond
Codes project and
dialogue groups
• The industry comes
together to start a client produce learning on
client protection
protection Campaign
2008
2004
• Many
• Smart Campaign
organizations
defines 6 Client
adopt their own
Protection Principles
statement of
principles
• Pocantico Declaration
from microfinance
leaders emphasizes
client protection failures
contact@e-mfp.eu
Input from the
industry on the
certification program
www.e-mfp.eu
Social Performance
Client Protection
Smart
Campaign
MFT
+ Social Commitment
• Invest in systems to
manage double bottom
line
Progress Out of
Poverty Index
(PPI)
• Measure social goals
• Tailor services to client
need and vulnerability
Investor Principles for Inclusive
Finance
Do No Harm!
contact@e-mfp.eu
Improve Clients’ Lives
www.e-mfp.eu
Client protection: 3 pillars
Regulation for
client protection
and supervision
RESPONSIBLE Financial
education and
FINANCE
capability
RESPONSIBLE
FINANCE
Standards and
codes of conduct
for the industry
4
contact@e-mfp.eu
www.e-mfp.eu
The State of Practice Report
1. How is the microfinance industry moving from
awareness to implementation of client
protection?
2. How is the industry currently doing on the
implementation of the Client Protection
Principles (CPPs)?
contact@e-mfp.eu
www.e-mfp.eu
Client Protection Principles
•
•
•
•
•
•
•
Appropriate product design and delivery
Prevention of over-indebtedness
Transparency
Responsible pricing
Fair and respectful treatment of clients
Privacy of client data
Mechanisms for complaint resolution
contact@e-mfp.eu
www.e-mfp.eu
Smart Campaign Activities
• Outreach
•
•
•
•
Partnerships with 30 national and regional
associations
Participation in major conferences and events where
client protection continues to be an important topic
Through endorsements and partnerships, touching
organizations that serve over 40 million low income
people
Website and many tools available in 5 languages
contact@e-mfp.eu
www.e-mfp.eu
Strategic Partners
Network Name
Country/Region
Level of engagement**
ACCESS -ASSIST
AEMFI
AFMIN
AMFA
AMFI
AMFIU
AMIR
AMSOFIPO
APIM
APIM
APSFD-CI
APSFD-Senegal*
CAM
CMF
Consortium Alafia
COPEME
Emprender
FAMF*
FINRURAL
GHAMFIN
India
Ethiopia
Africa Region
Azerbaijan
Kenya
Uganda
Rwanda
Mexico
Burkina Faso
Mali
Ivory Coast
Senegal
China
Nepal
Benin
Peru
Colombia
Cape Verde
Bolivia
Ghana
2
1
1
1
1
1
1
2
1
1
1
NA
1
1
1
2
1
NA
1
1
contact@e-mfp.eu
www.e-mfp.eu
Strategic Partners cont.
Network Name
Country/Region
Level of engagement**
MAMN
MCPI
MFC
Pakistan Microfinance Network
ProDesarrollo
RADIM
Red de microfinanzas del Paraguay
REDCAMIF
RFR
Russian Microfinance Network
Sa Dahn
Sanabel
YMN
ZAMFI*
Malawi
Philippines
Eastern Europe and Central Asia
Pakistan
Mexico
Argentina
Paraguay
Central America Region
Ecuador
Russia
India
MENA Region
Yemen
Zimbabwe
1
1
1
1
1
2
2
1
1
1
2
1
2
NA
* In discussion.
** Level 2 refers to associations that have committed to requiring their members to complete a client
protection self-assessment with the Smart Campaign's Getting Started Questionnaire, report to
the MIX annually, and participate in CPP trainings. Level 1 associations encompass all of the
above, but additionally are conducting a number of in-depth, third-party client protection
assessments.
contact@e-mfp.eu
www.e-mfp.eu
Smart Campaign Activities Cont.
• Tool development and dissemination
•
•
Now 40+ tools on www.smartcampaign.org
81,000 hits
• Trainings
•
•
53 Trainers and 42 Assessors
1000 managers and staff of MFIs
• Collaborations with key industry players
•
•
CGAP, MFTransparency, SPTF, etc.
Raters, Investors
contact@e-mfp.eu
www.e-mfp.eu
Top 15 tools – Campaign Site
Rank
Tool Name
No. of Hits
1
Getting Started Questionnaire: Client Protection Self-Assessment for Microfinance
Institutions
6424
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Client Protection Principles Training Series
Responsible Pricing: The State of the Practice
Microfund for Women: Client Business Evaluation Toolkit
Building Institutional Culture around a Code of Ethics at Compartamos
Smart Note: Collections with Dignity at FinComún
Smart Lending: Client Protection in the Individual Loan Process
Smart Note: Implementing an Industry Code of Conduct at PMN
Client Protection and Financial Education Simulation
How to Develop an Institutional Code of Ethics
Conducting Client Protection Assessments: A Guide
Smart Note: Facing Over-Indebtedness at Partner Microcredit Foundation
Banco Solidario: Loan Officer Training Manual
Complaints-Analysis Spreadsheet (FMMB)
Complaints-Handling Manual (Tamweelcom)
4221
2385
2007
2004
1935
1840
1805
1751
1673
1592
1410
1392
1309
1222
contact@e-mfp.eu
www.e-mfp.eu
CPP Implementation
1. Two streams of self-reported data submitted by MFIs:
The Smart Campaign’s “Getting Started Questionnaire”
and the MIX Social Performance Reports
2. Specific examples of client protection practices of MFIs
around the world
3. Third-party assessment data, the CPP Benchmarks 0.1
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www.e-mfp.eu
Self Reported vs. 3rd party data
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www.e-mfp.eu
CPP Benchmarks 0.1
contact@e-mfp.eu
www.e-mfp.eu
CPP Benchmarks 0.1, Cont.
contact@e-mfp.eu
www.e-mfp.eu
CPP Benchmarks 0.1, Cont.
contact@e-mfp.eu
www.e-mfp.eu
Prevention of Over-indebtedness
contact@e-mfp.eu
www.e-mfp.eu
Transparency
contact@e-mfp.eu
www.e-mfp.eu
Responsible Pricing
contact@e-mfp.eu
www.e-mfp.eu
Fair/ Respectful Treatment of Clients
contact@e-mfp.eu
www.e-mfp.eu
Privacy of Client Data
contact@e-mfp.eu
www.e-mfp.eu
Mechanisms for Complaint Resolution
contact@e-mfp.eu
www.e-mfp.eu
Case Studies
•
•
•
•
•
•
•
Setting Standards to Prevent Over-indebtedness at
AccessBank, Azerbaijan
An Investor Investing in Client Protection, Oikocredit
Sushila and Revati Help Ujjivan Teach by Example,
India
Gatsby Shows All, Uganda
Arohan’s Clockwork Microfinance, India
Treating Defaulters with Dignity at FMM Popayan,
Colombia
Alo, Fonkoze? Haiti
contact@e-mfp.eu
www.e-mfp.eu
In Short…
•
•
•
Client protection in microfinance is still relatively new,
but thriving
Organizations are at different levels of implementation
The state of practice is improving
contact@e-mfp.eu
www.e-mfp.eu
What Comes Next?
• Tools Trainings
• Client Voice Task Force
•
•
Client Education Resource Library focusing on rights
and responsibilities
Questionnaire to gather information from clients
around client protection
• Certification
•
•
•
Public Comment
Testing
Pilot Phase
contact@e-mfp.eu
www.e-mfp.eu
Certification Program
 Main rationale for the Client Protection Certification
program
 Minimum standards for client protection
 How much will certification cost?
 What happens if a financial institution is certified?
 What happens if a financial institution is NOT certified?
 How often will the certification be done?
 How will the certification be used?
 Who will certify?
 Other intended outcomes from certification
Tentative proposal will be presented
contact@e-mfp.eu
www.e-mfp.eu
Timeline for Certification
June 2010

February 2011

October – November 2011
November 3, 2011
November – Early 2012
2012
contact@e-mfp.eu
Task force launched
First meeting of the Technical sub-committee
of the Certification Task Force
Public comment period on the certification
program:

Open webinars for Q&A

Send your comments by email
Session on certification at EMW
16:00-17:30
Testing period for indicators and benchmarks.
Launch of Pilot Client Protection Certification
Program with eligible specialized microfinance
rating agencies.
www.e-mfp.eu
Thank you!
Questions? Comments?
Send us an email:
comments@smartcampaign.org
www.smartcampaign.org
contact@e-mfp.eu
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