MFTransparency, a US-based nongovernmental organization that aims to provide information on credit products and pricing in a clear and uniform fashion, recently released the pricing data report of its Transparent Pricing Initiative in India. The report offers an analysis of data collected between April 2010 and September 2010 from 82 microfinance institutions, which accounts for approximately 80 percent of the estimated total Indian market measured by gross loan portfolio and 77 percent of active borrowers. Key findings include analysis of pricing by institution type; loan purpose; and the relative importance of different fee types, insurance charges and compulsory savings requirements. The report also contains a section on costing that compares the aggregate Indian market with those of other microfinance markets, including Bolivia, Bangladesh and Mexico.
MFTransparency will convene a meeting in Mumbai on February 25 to discuss the findings of the India segment of the Transparent Pricing Initiative.
The work was supported by funding from Citi Foundation and the Michael & Susan Dell Foundation from the United States, the Microfinance Institutions Network from India, and Standard Chartered PLC, which is headquartered in England. It was also supported by its implementation partner, ACCESS Development Services from India [1].
By: Jacqueline Foelster, Research Associate
About MFTransparency: MFTransparency is a nongovernmental organization that aims to provide “information on credit products and their prices in a clear and consistent fashion”? for the microfinance industry. MFTransparency collects data on the interest and fees charged on microfinance loan products in order to calculate the effective interest rates on those loans. Its intention is to establish the industry standard for pricing disclosure and to facilitate a fair exchange of microfinance products between suppliers and consumers. MFTransparency was launched in July 2008 and is based in the US. According to its website, as of February 2011, 700 industry leaders, including microfinance institutions and apex banks currently serving 107 million clients worldwide, have signed the endorsement statement.
About Citi Foundation: the Citi Foundation provides grants and guarantees focusing on the areas of microfinance, small and growing businesses, education, asset building and neighborhood revitalization. Citi Foundation has total assets of USD 65.8 million, USD 12.3 million of which is allocated to 152 total active investments as of 2009. The foundation is affiliated with international financial services corporation Citi.
About Michael and Susan Dell Foundation: the Michael and Susan Dell Foundation was established in 1999 to provide grants to organizations that focus on education, childhood health, and family economic stability.
About Microfinance Institutions Network (MFIN): The Microfinance Institutions Network (MFIN) is a trade association of Indian microfinance lenders. MFIN is presided by Vijay Mahajan, who is also the Chairman of Hyderabad-based BASIX. MFIN consists of 39 NBFC-MFIs in India, which account for more than 80 percent of the Indian market. MFIN is supported by Omidyar Network, a philanthropic investment firm, and the International Finance Corporation (IFC), a member of the World Bank Group. Omidyar Network funds MFIN in support of its efforts.
About ACCESS Development Services: ACCESS Development Services, which is based in India, is “a not-for-profit organization that offers consulting services to microfinance institutions (MFIs) through various means.”? It offers capacity building and technical services on topics such as operational organization, portfolio management, and financial management. It also works to facilitate funding to 130 member MFIs through the ACCESS Microfinance Alliance (AmFA). Lastly, it organizes the Microfinance India Summit annually in order to provide “the microfinance community the opportunity to meet and learn from each other, participate in discussions and debates on key issues and be exposed to the international experiences and innovations.”? ACCESS Development Services was founded in 2006.
Sources and Resources:
[1] MFTransparency Press Release: “Launch of Transparent Pricing Data for the Indian Microfinance Market,”? February 2, 2011. http://www.mftransparency.org/pages/launch-of-transparent-pricing-data-for-the-indian-microfinance-market/
MicroCapital’s Microfinance Universe Profile: MFTransparency, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MFTransparency
MicroCapital’s Microfinance Universe Profile: Citi Foundation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Citi+Foundation
MicroCapital’s Microfinance Universe Profile: Michael and Susan Dell Foundation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Michael+and+Susan+Dell+Foundation
MicroCapital’s Microfinance Universe Profile: Microfinance Institutions Network (MFIN), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Institutions+Network+%28MFIN%29
MicroCapital’s Microfinance Universe Profile: Standard Chartered PLC, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Standard+Chartered+PLC
MicroCapital’s Microfinance Universe Profile: ACCESS Development Services, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCESS+Development+Services
MicroCapital.org Article, August 10, 2010: “MFTransparency to Launch Transparent Pricing Initiative in India with Participation of 82 Microfinance Institutions to Date”, https://www.microcapital.org/microcapital-brief-mftransparency-to-launch-transparent-pricing-initiative-in-india-with-participation-of-82-microfinance-institutions-to-date/
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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