AMFIU Association of Micro Finance Institutions of Uganda THE TRANSPARENCY PROGRAM AT AMFIU -...

AMFIU

Association of Micro FinanceInstitutions of Uganda

THE TRANSPARENCY PROGRAM AT AMFIU -

Experiences

Presented at the Peer Learning Event

for EU/ACP Grantees

by Zainabu Asiimwe),

Consumer Affairs Specialist AMFIU

([email protected])

AMFIU


Outline

• Background (2004-2006)• Why AMFIU• Transparency program (since 2007) • Transparency program - Implementation• Role of stakeholders • Challenges• Transparency in Practice• Lessons learned

AMFIU


Background (2004-2006)

Consumer Education Program

…Base line survey showed that:- Low knowledge about financial services- Negative attitude towards financial institutions- Some customers better off saving than taking loans

…Program was to address:- Rights and responsibilities of consumer- Financial services available (informed choice)

…Program was designed as:- Multi-channel, public campaign (Radio, Flip Charts,

posters/fliers, newspaper)

AMFIU


Short term consumer interest

Short term MFI interest

Take small loans that meet immediate needs

Would want to give out big loan amounts

Get free from debt Continue as a credit client and reduce drop outs

Shop around for the institution that responds to the immediate needs

"Lock-in" of customer, e. g. through quick disbursement without thorough appraisal

Lowest total cost of loan Highest returns on services

Why AMFIU?

AMFIU mandate to orient MFIs towards long-term perspective

In the short perspective, client and MFI-interests might be at conflict:

AMFIU


Long term consumer interest Long term MFI interest

Be transparent to avoid over-indebtedness

Be transparent on fees and interest rates to create trust, i. e. long-term relationship

Sustain a relationship of trust with the MFI to maintain easy access to services

Maintain relationship of trust with the client for good portfolio quality

Use different services to meet personal needs in the most effective way

Offer a variety of products

Shop around to be informed about the range of services and their best prices available in the market

Maximize efficiency and productivity in order to retain customers and increase the market share

Why AMFIU?

In the long perspective, client and MFI-interests are compliant:

AMFIU supports its members to invest into long-term position.

AMFIU


Foundation: 1st phase of CEP (2004-2006)

CEP-Launch and Dissemination in 35 districts

MFIs compliant

to CCP

Lobby and advocacyTOT and

Training Manuals forMFIs client trainings

Handbook on CE

Display of fees and interest rates / total cost

Informed ChoicesKnowledge Sharing

Rights and ResponsibilitiesInstitutionalizing of Market drive

Marketing of Performance Monitoring (PMT/PMS)

Transparency program (since 2007)

AMFIU


Program Implementation - Channels

1. Radio programs/spots

They target both MFIs/SACCOs

and consumer.

The themes of the programs are

1. Savings

2. Debt management

3. Consumer code of practice (CCP) for MFIs and SACCOs

4. SACCO formation and management

5. Making choices i.e. amongst institution or products.

AMFIU


2. Trainers of Trainers (TOT)

1. Budgeting ( Use money wisely)2. Savings (You can do it)3. Debt management (Handle with care)4. Bank services ( Know your options)5. Financial Negotiation (Communicate with confidence)

Institutions e.g. DPCs, Straight Talk, UCA CEEWA Uganda,

MSC Ltd

Clients

TOT Manual

MFIs

This TOT channel recognize that Consumer financial education is a win-win investment for both providers and consumers.


AMFIU

Association of Micro FinanceInstitutions of Uganda3. Music dance and drama

Music dance and drama addresses the following themes and these are presented in local languages as well as English. The target for the show are both consumers as well as MFIs.

1. Savings

2. Debt management

3. Government programs and how to access them

4. How a SACCO is managed


AMFIU


Posters


AMFIU


Challenges

1. Sustainability of the program

2. Dependence on donor funding

3. Policy change by government

4. Lack of redress mechanisms

5. Adaptation to different situations

AMFIU


Lessons learned

Consumers who are financially educated can take genuine responsibility for their financial affairs.

Understanding and awareness of the consumers influence how much benefits they derive from competition in the market place.

Effectiveness of information given to a consumer depends not only on the quality but also the capacity of the consumer to

understand it. Use of multiple channels is advisable.

AMFIU as the association is the sector’s custodian for embedding a long-term perspective into the decisions of MFIs

and consumers.

AMFIU


Thank Youvery muchfor your attention

Zainabu Asiimwe, Consumer Affairs Specialist

AMFIU ([email protected])

AMFIU Association of Micro Finance Institutions of Uganda THE TRANSPARENCY PROGRAM AT AMFIU -...

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