Sights Set on Providing Microfinance Institutions Worldwide with Tools to Ensure Commitment to Clients’ Best Interests
Washington, DC, March 30, 2009 – In the face of major client protection failures in the mainstream financial sector, leaders of the microfinance industry came together last week seeking means to ensure that microfinance providers worldwide remain committed to serving their clients’ best interests.
The Center for Financial Inclusion at ACCION International last week hosted the first meeting of a distinguished Steering Committee for the Campaign for Client Protection in Microfinance. Twenty-three recognized leaders in the microfinance industry – representing microfinance organizations from every region of the world – officially endorsed the Campaign’s Six Principles of Client Protection in Microfinance and set the course for the Campaign itself.
The Campaign for Client Protection in Microfinance is an industry-wide alliance formed to affirm and institutionalize the commitment to client welfare in the practices of microfinance organizations (MFIs) worldwide. The Campaign’s six principles include ensuring that MFIs do not engage in reckless or predatory lending; that they are transparent with clients about prices, fees, and terms; that they treat clients with dignity, even during debt collection; and that they keep client data secure.
The wide geographic distribution of Steering Committee members ensures that the Campaign will be broad-based and help shape the practice and principles of thousands of microfinance organizations currently serving tens of millions of the working and entrepreneurial poor worldwide. Committee members include Clara Serra de Akerman, President, Women’s World Banking Colombia; Daouda Sawadogo, General Manager, Fédération des Caisses Populaires du Burkina (FCPB), Burkina Faso; Shireen Farrag, Executive Director, Sanabel Network, Egypt; Anne-Francoise Lefevre, Head of WSBI Institutional Relations, World Savings Banks Institute (WSBI), Belgium; Asad Mahmood, Managing Director, Global Social Investment Funds, Deutsche Bank, United States; Vipin Sharma, Managing Director, Access Development & Access Alliance, India; Kate McKee, Senior Advisor, CGAP, United States; and Elisabeth Rhyne, Managing Director, Center for Financial Inclusion at ACCION International, United States. A complete list is here.
“As MFIs come under the pressure of poor economic conditions, it is critical for the industry to join together and proactively safeguard the interests of microfinance clients through appropriate policies, practices, and products,” said Steering Committee member Mathias Katamba, CEO, Uganda Finance Trust.
“Microfinance was born of a desire to help the poor help themselves, and as the industry has grown it’s been remarkably successful in avoiding the exploitive practices that characterized the subprime crisis in the United States,” said microfinance investor Pilar Ramirez, Managing Director of Latin America’s LOC Fund, also a committee member. “As microfinance matures, the time is ripe to codify core values and develop practices and standards that will maintain commitment to those values as a norm.”
To date, 43 leading microfinance organizations, 50 of the largest microfinance investors, and 125 individuals have endorsed the Campaign for Client Protection in Microfinance. In addition to securing the commitment of MFIs to the six principles, the Campaign will provide practical resources – on-line assessments, training and communications materials – to facilitate and support their implementation. Presently, MFIs can download an abbreviated client protection self-assessment tool on the Campaign website. The tool is part of a larger social performance measurement tool that can be found on the website of the MIX Market, the largest repository of MFI financial information. Ultimately, the Campaign website will host a comprehensive library of resources for MFIs, provided by experts in the field.
About The Smart Campaign
The Smart Campaign is a global campaign spearheaded by microfinance leaders from around the world who believe that protecting clients is not only the right thing to do, but the smart thing to do. The Smart Campaign has formed an all-star Steering Committee comprised of ranking members of the industry representing a diversity of regions, expertise and institutions, including CGAP at The World Bank, Deutsche Bank Social Investment Group (NYSE: DB), the Center for Financial Inclusion at ACCION International, the World Savings Bank Institute, WWB Colombia, KfW (Germany), Ujjivan (India), CARD Bank (Philippines), the Microfinance Centre (Eastern Europe & Former Soviet Union), and Fonkoze (Haiti). By providing microfinance institutions the tools and resources they need to deliver transparent, respectful and prudent financial services to all clients, The Smart Campaign is helping the industry make good on its double bottom line promise and elevating microfinance as a model of responsible banking around the world. Visit us online at www.smartcampaign.org.
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