MICROCAPITAL.ORG STORY: Citi Foundation Provides $25,000 Grant to MFTransparency, Provider of Data of Price Transparency for the Microfinance Industry

Citi Foundation, a grant-making charitable foundation that is part of the financial services company, Citigroup, has provided a USD 25 thousand grant to MFTransparency, a “global initiative for fair and transparent pricing in the microfinance industry” [1,2,3,4]. MFTransparency plans to use the grant to “increase its industry presence and visibility, secure additional long term funding, and progress towards its near and long term goals” [1].

In the long term, MFTransparency has plans to report on pricing for 5,000 microfinance institutions (MFIs) in 75 countries, including increasing coverage by 20 countries over the next year [1]. Thus far, it has “organized transparent pricing efforts in Bosnia, and Herzegovina, Peru, Cambodia, Azerbaijan, Kenya and Bangladesh” [1]. Microcapital reported on the first phase of its transparent pricing efforts that took place in Bosnia and Herzegovina [5]. The information released on the country includes data from 100 percent of the MFIs from the “local Association of Microfinance Institutions (AMFI) network” [1]. Cambodian loan product data was released on October 26, 2009 [1]. Microcapital has also reported on other stories regarding transparency in microfinance [6,7,8,9,10,11].

MFTransparency reports on original MFI contracts instead of average portfolio yields in order to provide “a better understanding of how individual products are priced” [5]. This pricing includes interest rates and fees [1]. They also publish educational materials on their website in order to better educate clients and investors about credit pricing. They have plans to “develop and distribute a broad range of educational materials related to interest rates and pricing that will be targeted to various microfinance industry stakeholder groups” [1,4].

Bob Annibale, Citi’s Global Director for Microfinance stressed the importance of transparent pricing in terms of customers being able to easily compare lending products from different institutions, and investors being able to assess the financial and social performance of institutions [1]. Chuck Waterfield, Founder and CEO of MFTransparency sees the grant as an important step in making transparent pricing an industry standard [1].

Citi Foundation uses grants, guarantees, and technical assistance to support “program innovations” in various areas including microfinance and microenterprise, small and growing businesses, general education, and financial education and asset building [2]. According to the MIX Market, the microfinance information clearinghouse, Citi Foundation’s total fund assets are over USD 89.9 million [12]. In the last 10 years, Citi Foundation has granted over USD 70 million to 350 microfinance programs in 57 countries [1].

By Chris Maggio, Research Assistant

Bibliography
[1] MFTransparency.org press release entitled ‘Citi Foundation Supports MFTransparency with $25,000 Grant’: http://www.mftransparency.org/pages/citi-foundation-grant
[2] Citi Foundation: http://www.citi.com/citi/foundation/
[3] Citigroup: http://www.citigroup.com/citi/homepage/
[4] MFTransparency: http://www.mftransparency.org/
[5] MICROCAPITAL.ORG STORY: MicroFinance Transparency Launches First Publicly Available True-Cost Pricing Data for Microfinance Loan Products: https://www.microcapital.org/microcapitalorg-story-microfinance-transparency-launches-first-publicly-available-true-cost-pricing-data-for-microfinance-loan-products/
[6] MICROCAPITAL.ORG STORY: CGAP Microfinance Blog Supports Efforts Of MFTransparency To Promote Transparent Pricing And Enhance Consumer Protection In The Microfinance Industry: https://www.microcapital.org/microcapitalorg-story-cgap-microfinance-blog-supports-efforts-of-mftransparency-to-promote-transparent-pricing-and-enhance-consumer-protection-in-the-microfinance-industry/
[7] MICROFINANCE EVENT: MicroFinance Transparency (MFTransparency) & the Azerbaijani Microfinance Association (AMFA) to Hold Workshop & Kick off Transparent Pricing Initiative in Baku, Azerbaijan October 8th, 2009: https://www.microcapital.org/microfinance-event-microfinance-transparency-mftransparency-the-azerbaijani-microfinance-association-amfa-to-hold-workshop-kick-off-transparent-pricing-initiative-in-baku-azerbaijan/
[8] MICROCAPITAL PAPER WRAP-UP: Financial Infrastructure: Building Access Through Transparent and Stable Financial Systems by the World Bank: https://www.microcapital.org/microcapital-paper-wrap-up-financial-infrastructure-building-access-through-transparent-and-stable-financial-systems-by-the-world-bank/
[9] MICROCAPITAL STORY: Client Protection In Microfinance – Observations by ACCION and Prizma Mikro From A Hanson Wade Conference On Microfinance Investments: https://www.microcapital.org/microcapital-story-client-protection-in-microfinance-observations-by-accion-and-prizma-mikro-from-a-hanson-wade-conference-on-microfinance-investments/
[10] MICROFINANCE PAPER WRAP-UP: Microfinance Sector’s Consumer Protection Initiative, By Maheen Saleem and Aban Haq: https://www.microcapital.org/microfinance-paper-wrap-up-microfinance-sectors-consumer-protection-initiative-by-maheen-saleem-and-aban-haq/
[11] MICROCAPITAL STORY: Thirty-Five Organizations Sign Client Protection Principles to Ensure Fair Treatment and Financial Protection of Low-Income Microfinance Clients: https://www.microcapital.org/microcapital-story-thirty-five-organizations-sign-client-protection-principles-to-ensure-fair-treatment-and-financial-protection-of-low-income-microfinance-clients/
[12] Citi Foundation on the MIX Market: http://www.mixmarket.org/funders/citi-foundation

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