Overview: What is a Smart Assessment?
The Smart Assessment is an external diagnostic tool for microfinance institutions (MFIs) to thoroughly examine their implementation of the Client Protection Principles. It is an excellent mechanism for mitigating risk, as it takes an MFI through a process of internal review to identify strengths, weaknesses, and ultimately opportunities to enhance business practices around client protection.
Benefits: A Smart Assessment is a major step toward securing an institution’s position as a pro-consumer organization. MFIs receive a full diagnostic of their practices vis-à-vis the Client Protection Principles. They have the opportunity to examine which of their current practices strongly support the principles and which need improvement. With the insight and expertise of Smart-Certified Assessors, MFIs will better understand client protection and how to improve practices. At the same time, if they are willing to publish the study’s outcome (in abbreviated form), they will be able to represent themselves as pro-consumer organizations before key stakeholders including clients, investors, regulators, and the public. Among the benefits of undergoing a Smart Assessment and improving client protection practices:
- Strong client protection practices support increased client retention
- Awareness of strengths and weaknesses helps an organization take steps to mitigate risks
- Helps retain staff by putting into practice the MFI’s corporate values
- Attracts investments from social investors and donors
- Builds the brand of the financial institution as one that is loyal to its clients
The full text of Smart Assessments belongs to the organization being assessed, and the organization may publish it on their websites and/or in other public materials. If permission is granted (and this is highly recommended), The Smart Campaign will publish a one-page results summary, giving an overall result with a brief comment on each of the six principles. We ask that the assessed organizations also share the assessment report with The Smart Campaign to contribute to the body of knowledge available on client protection.
Time: An in-depth assessment typically involves four to five days with two Smart-Certified Assessors on-site. MFIs should expect their management and operations personnel to be highly engaged throughout the process.
Process: Two Smart-Certified Assessors will visit the institution on-site to examine how the MFI implements the Client Protection Principles at three broad levels: 1) market and regulatory context, 2) MFI policies, procedures, and systems, and 3) organizational culture and how policies are reflected in staff behavior. The Smart Assessment will review the institution’s documentation and hold interviews with leadership, management, and key line staff. The assessment team will also observe staff-customer interaction at the branch level.
At the end of the assessment, a de-briefing will be held with management to discuss areas of good performance and areas of vulnerability. In contrast with many other forms of assessment, The Smart Assessment includes recommendations for pilot initiatives the institution can undertake to address identified weaknesses. No later than four weeks after the assessment, the team will provide a detailed written report which contains the Smart Assessors’ diagnostic findings and recommendations for action.
Generic Smart Assessment Report
The Smart Assessment Report is a diagnostic of the way a microfinance institution translates the Client Protection Principles into practice. A sample “generic” assessment report is available here . The report identifies both strong practices and practices that may present vulnerabilities within an MFI. It presents suggestions developed through joint discussion between MFI staff and the Smart team for pilot efforts the institution may wish to undertake to improve implementation of the Client Protection Principles. Finally, it provides a one-page summary with an overall score for the institution.
*If you are interested in taking part in an in-depth client protection assessment, please contact Sergio Guzmán at This e-mail address is being protected from spambots. You need JavaScript enabled to view it at The Smart Campaign and/or reach out to one of the Smart-Certified Assessors from your region.
