Consumer Protection in Microfinance Exceeds 15-Million-Client Mark
Momentum Growing for Microfinance Institutions to Become Certified For Adhering to Client-Protection Principles
WASHINGTON, Feb. 19, 2015 /PRNewswire/ -- The Smart Campaign, a global movement to embed a set of client-protection principles into the fabric of the microfinance industry, today announced that the number of certified microfinance institutions (MFIs) is growing rapidly, and that those MFIs certified as meeting the standards for consumer protection now serve more than 15 million clients worldwide, according to MixMarket data.
To date, 28 microfinance institutions, from Latin America to Eastern Europe and South Asia, have achieved Smart Certification, including some of the world's largest and best-known MFIs.
The Smart Campaign's Client Protection Certification Program contains a core set of standards against which institutions are evaluated by independent, third-party raters. Smart Certification publicly recognizes those institutions providing financial services to microentrepreneurs whose standards of care uphold the microfinance industry's seven Client Protection Principles, which cover such important areas as transparency, fair and respectful treatment, responsible pricing and prevention of over-indebtedness. Customers of certified organizations can be confident that their financial service provider takes care to treat them responsibly.
"Momentum to improve client protection is accelerating, with scores of MFIs across the globe improving their client-protection practices, and being recognized for it through certification," said Isabelle Barrès, director of the Smart Campaign. "For example, as measured by data provided by the MixMarket, more than 50 percent of all microfinance clients in Kyrgyzstan do business with certified MFIs. In India, the world's largest microfinance market, more than 25 percent of all microfinance clients are served by certified MFIs. When a critical mass of institutions in a market demonstrates good practices, pressure grows on other institutions do to the same."
"We're approaching the tipping point in the adoption of consumer-protection standards for the poor," said Anne Hastings, managing director of the Microfinance CEO Working Group, a collaboration comprising many of the world's leading microfinance institutions. "Thanks to the unwavering commitment of the leadership of these organizations, the majority of the 220 MFIs in the Working Group's networks are either certified or working hard to become certified." The Working Group includes the CEOs of Accion, FINCA, Freedom from Hunger, Grameen Foundation, Opportunity International, Pro Mujer, Vision Fund and Women's World Banking, as well as the directors of microfinance of CARE International, BRAC and BRAC International.
"As this program grows, we envision Client Protection Certification becoming a widely recognized, distinguishing mark, like Fair Trade, that signals to clients, investors, internal stakeholders and the general public that its bearer upholds strong client-protection principles," said Elisabeth Rhyne, managing director of the Center for Financial Inclusion at Accion, where the Smart Campaign's secretariat is housed.
The Client Protection Certification Program is possible thanks to partnerships with The MasterCard Foundation, the Ford Foundation, the International Finance Corporation, the Multilateral Investment Fund (a member of the IDB Group), Agence Française de Développement, and microfinance pioneer Accion. It has been shaped through cooperation with dozens of supporting organizations, notably Smart Campaign co-founder, the Consultative Group to Assist the Poor (CGAP).
About the Smart Campaign
The Smart Campaign is a global movement to embed a set of client-protection principles deep within the microfinance industry. It is governed by a Steering Committee representing a broad cross-section of the industry and is housed at the Center for Financial Inclusion at Accion. By providing microfinance institutions with the tools and resources they need to deliver transparency, respectful and prudent financial services to all clients, the Smart Campaign is helping the industry maintain its commitment to treating clients fairly. More information on the Client Protection Certification Program can be found here.
SOURCE The Smart Campaign
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