MICROFINANCE PUBLICATION ROUND-UP: Legislation for Client Protection; Consumer Satisfaction in India; Women’s Financial Inclusion Data

“Client Protection Principles: Model Law and Commentary for Financial Consumer Protection;” published by the Microfinance CEO Working Group; April 2015; 66 pages; available at: http://microfinanceceoworkinggroup.org/wp-content/uploads/2015/04/CPP-Model-Laws-April-2015.pdf

This publication offers guidelines for creating legislation to protect low-income consumers of financial services.

The document draws on existing scholarship, laws, and global regulations and is based on the Client Protection Principles, a set of guidelines developed by the US-based Smart Campaign that is intended to help microfinance institutions (MFIs) improve their business through good ethics. The publication is meant to be used for three key actions: developing new legislation; assessing a jurisdiction’s current client protection regulations; and developing codes of conduct and guidelines for service providers and/or industry associations. Topics covered include general requirements for financial service providers, appropriate product design and delivery, preventing over-indebtedness, and responsible pricing, among others.

“Voice of the Client: An Analysis of Client Satisfaction and Consumer Protection across Four Microfinance Institutions in India;” published by the Microfinance Information Exchange (MIX); October 2015; 27 pages; available at: http://www.themix.org/node/1814

This report is a summary of findings from the Voice of the Client project in India, through which client satisfaction data was collected via mobile technology from a total of approximately 6,000 clients of four Indian MFIs – Cashpor, Satin, Sonata and Ujjivan. Questions targeted five of the Client Protection Principles, a set of guidelines developed by the Smart Campaign to help MFIs improve their business: appropriate product design, prevention of over-indebtedness, transparency, fair and respectful treatment of clients, and mechanisms for complaint resolution. The survey found a high level of overall satisfaction, with customer service and interactions with loan officers cited as particularly strong. A majority of clients seemed to have a good understanding of their loan terms, interest rates and repayment schedules. However, the findings also showed room for improvement. Over one third of respondents noted that loan amounts were not high enough to meet their needs, and many clients either had difficulty meeting payment deadlines or had to borrow from another institution in order to make payments on time. The study also examined the survey process and found that clients that responded via interactive voice response may give more candid answers than those who responded via call center representatives or in-person interviews.

“The Value of Sex-Disaggregated Data;” by the Global Banking Alliance (GBA), Inter-American Development Bank (IDB) and Data2x and published by GBA; September 2015; 35 pages; available at: http://www.gbaforwomen.org/download/draft-report-measuring-womens-financial-inclusion/

This draft publication is based on interviews with approximately 50 regulators, policymakers, bankers and representatives of international finance institutions about the importance of data on women’s access to financial services. The report includes an overview of women’s financial inclusion and financial stability as well as a summary of current sex-disaggregated demand- and supply-side data regarding financial inclusion. It also looks at data from several countries that are already collecting and analyzing sex-disaggregated financial data. Finally, the authors propose several strategies for improving the collection and use of sex-disaggregated data, including cross-cutting gender strategies at the national level, establishing multi-stakeholder taskforces and setting gender-specific targets.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

Microfinance CEO Working Group Press Release: “Microfinance Leaders Offer Model Law Resource for Financial Consumer Protection,” http://microfinanceceoworkinggroup.org/press-release-microfinance-leaders-offer-model-law-resource-financial-consumer-protection/

Microfinance Information Exchange Press Release: “Voice of the Client: An Analysis of Client Satisfaction and Consumer Protection across Four Microfinance Institutions in India,” http://www.themix.org/node/1814

PR Newswire Press Release: “New Research Explores the Value of Data to Women’s Financial Inclusion,” http://www.prnewswire.com/news-releases/new-research-explores-the-value-of-data-to-womens-financial-inclusion-300150320.html

MicroCapital Universe Profile: Microfinance CEO Working Group 

MicroCapital Universe Profile: Inter-American Development Bank

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