Source: MicroFinance Transparency.
Original press release not available online.
LANCASTER, Pennsylvania, United States, October 21 – MicroFinance Transparency (MFTransparency) web-launched the world’s first accurate and extensive publicly available true-cost prices for microfinance loan products beginning with Bosnia and Herzegovina on 19 October 2009. (www.mftransparency.org). The country-by-country phased roll out of pricing data and following webinar will bring transparency to the covered markets by informing microfinance clients and practitioners of their market’s true prices.
As the first country included in the data launch, Bosnia and Herzegovina is the world’s first country to have 100% coverage of micro-loan products offered by members of the AMFI network under MFTransparency’s Global Transparent Pricing Initiative. Cambodia and Peru will follow on October 26th and November 2nd respectively. The phased data launch will allow each country’s market to be examined by the industry and public in turn. An educational webinar held the week of November 9th will provide a public forum in which the data can be discussed and interpreted. For more information: Data Launch Description (http://www.mftransparency.org/pages/data-launch-summary/)
This major milestone for MFTransparency is the result of months of hard work collecting data in several countries. In each country included in the initial Transparent Pricing Initiative, MFTransparency has collected data on the interest and fees charged on each microfinance loan product in order to calculate the accurate, true price (Effective Interest Rate) on those loans.
The data roll out marks significant progress for the young organization’s work combating confusing and predatory pricing. “We would like to give special thanks to the many organizations that have provided the financial support that enabled us to collect this data and publish it on our website,” wrote MFTransparency’s President Larry Reed.
MFTransparency’s efforts have thus far met with cooperation and encouragement from their colleagues in the microfinance industry. The group recognized the contributions of their partners writing, “This data launch could not have happened without the strong cooperation we have received from MFIs, banks and credit unions in our first data collection efforts. All participating microfinance practitioners have voluntarily contributed their pricing data to MFTransparency’s Global Transparent Pricing Initiative.”
The need for an initiative in transparent pricing has arisen in recent years as microfinance drew negative press attention for allegedly excessive interest rates and the use of confusing product pricing. MFTransparency has pointed out, “For example, a quoted interest rate of 3% per month can result in an APR between 36% and 96% and beyond.” [2] MFTransparency hopes to establish an industry standard for cost calculation that will allow for easier product comparison.
The schedule for the data launch and associated information is provided in the following:
Rollout Schedule
MFTransparency will have a phased rollout of data from our first three countries over the three-week data launch period. More countries will be coming on-line in the coming months. Following is the schedule for the data launch:
October 19th – Bosnia Data
All members of the Association of Microfinance Institutions in Bosnia and Herzegovina have submitted pricing data to us, giving us a complete picture of the microfinance loan products available from different types of lending institutions in the country. You will be able to sort through this data by loan size, interest rate and organization type.
October 26th – Cambodia Data
We have collected pricing data from microfinance lenders representing over 95% of the market in Cambodia, where the National Bank of Cambodia inaugurated our Transparent Pricing Initiative.
November 2nd – Peru Data
Our largest data set comes from Peru, with over 35 microfinance institutions reporting on more than 150 loan products used by more than 1 million borrowers.
Week of November 9th – Webinar
Once data is available for the first three countries, we will host a webinar to discuss what the data tell us and to answer questions from those of you reviewing the data. By this time we will also have discussion boards on our website so that the discussion can continue after the webinar ends.
About MFTransparency
MicroFinance Transparency is an international non-governmental organization founded in 2008 with the purpose of facilitating transparent markets through the dissemination of true cost information to all market stakeholders. MFTransparency represents an industry movement toward fair practices and responsibility. Based in the United States, the group has organized transparent pricing efforts in Bosnia, Peru, Cambodia, Azerbaijan, Kenya and Bangladesh. For more information please visit (www.mftransparency.org). Grameen Bank’s Dr. Mohammad Yunus and Elizabeth Littlefield, CEO of CGAP, as well as more than 200 industry professionals and organizations have committed to transparent pricing by endorsing MFTransparency and its initiative.
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