Anne Hastings, Smart Campaign Steering Committee member and CEO of the Haitian MFI Fonkoze, spoke with the Smart Campaign recently about her institution’s culture of giving clients the tools they need to protect themselves. She also discussed how endorsing the Smart Campaign gave Fonkoze a new way to express this institutional culture...

The Smart Campaign: Why did you endorse the Smart Campaign, both as an individual and as an organization (Fonkoze)?

Anne Hastings: The reason I came to Haiti 15 years ago was to learn from the struggle of poor women to make a better life for their families. I wanted to accompany them in their struggle. So our clients have been the centerpiece of my work in building this institution. I try to ask myself every day what I can do to better equip them with the tools they need to protect their own interests, rather than us protecting them. I believe this is at the heart of the Smart Campaign.

As an institution, I think we could see the effect on our clients when we allowed them to borrow more than they could manage. It is in our institutional culture to give our clients the tools they need to protect themselves, so endorsing the Smart Campaign gave voice to this institutional culture. We want to acknowledge our commitments to the world in order to strengthen their force for us and for others.

TSC: What consumer protection-related accomplishments in your career are you most proud of?

AH: For years I have been very proud of our work to protect our clients from taking on too much debt. But right now, we are just about to launch a toll-free number to allow both clients and employees to call to lodge a complaint whenever they feel an employee, a supervisor, or the institution has abused them in some way. A committee will investigate and rule on each legitimate complaint. Although it’s not yet a reality, I believe that this has the potential to be our greatest accomplishment. Impoverished women in Haiti are treated with such disrespect that allowing them to voice their complaints and build trust that they will receive a response holds the potential for liberating them in ways they never hoped for.

TSC: As CEO of Fonkoze Financial Services, what are some specific practices/initiatives related to client protection that Fonkoze has undertaken?

AH: One that I think was very important was that after last year’s earthquake in Haiti, we developed, tested, and implemented a tool to assess whether our clients were really ready to take on debt. We looked not just at their business, but also at their psychological and physical health at the degree of recovery in the local economy in which they were operating. I hope this will be a tool that we use not only post-disaster, but even when we are disaster-free. Debt inevitably brings stress and new responsibilities to people when they are struggling most. It is a critically important tool, but one that only can be useful for clients who are truly prepared and ready to manage it.

A second example is our focus from the beginning on the importance of a full range of financial tools – including savings, remittances, microinsurance – rather than just credit. And, we were combining literacy and business skills education with financial services from the very first day. All of this is part of a broad empowerment strategy – which is at the heart of the Smart Campaign, I believe.

TSC: The microfinance industry now generally recognizes the importance of client protection. What major obstacles remain for organizations to dynamically and inclusively incorporate client protection into their business models?

AH: I’m not convinced that the industry as a whole has truly absorbed the importance of client protection to the industry itself. We’ve recognized it at a superficial level, but I’m not sure we have really understood it. For instance, are we protecting our clients – or should we be empowering them to protect themselves? The Smart Campaign, I believe, sees this distinction, but the industry as a whole has a very long way to go, I fear. I’m also not sure the industry as a whole has grasped that in these times of criticism of the industry, the Smart Campaign will become critical to its long-term sustainability.

TSC: What do you consider to be the biggest accomplishment the microfinance community could achieve in 2011 in the name of client protection?

AH: I believe we have to move towards some type of certification for microfinance institutions, as well as for investor groups. To reach consensus around what that should look like and how it can be fairly implemented throughout the industry would be a tremendous achievement, even if we take two years to get there. But we should all be prepared to work towards that in a sincere and meaningful way.