Introduction to the principles of client protection to post

Client Protection Principles:

An Introduction to the Smart Campaign

This presentation is made possible

by the Smart Campaign

www.smartcampaign.org

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1. Introduction to the Smart Campaign

2. Principles of client protection

3. Why the Smart Campaign matters now

4. Feedback from participants

5. Tools available for improving client protection

6. Conclusion and call to action

Agenda

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The Smart Campaign…

…represents a global, industry-wide effort: 1,400+ endorsers from over 100 countries

…has an international steering committee

…collaborates with the Social Performance Task Force (SPTF), MIX Market Social Reporting, MF Rating Agencies, MFTransparency, and many others

…is housed at the Center for Financial Inclusion at ACCION International

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Vision of the Smart Campaign

The Smart Campaign envisions a fundamental transformation of the microfinance industry in four

key ways:

Focus on clients

•All industry stakeholders will put the interests of clients first

Transparent and prudent services

•MFIs will provide transparent, respectful, prudent financial services

Full integration of client protection

•Client protection principles will be fully integrated into all microfinance operations

Gain pro-consumer reputation

•The microfinance industry will be distinguished as leader in responsible finance

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Timeline of the Development of Principles

2008 & 2009

• Center for Financial Inclusion’s Beyond Codes project and dialogue groups produce learning on client protection

2008

• Pocantico Declaration from microfinance leaders emphasizes client protection failures

2004

• ACCION adoptsa statement ofprinciples developed by the MicroFinance Network (MFN)

2010

• The Smart Campaign defines six client protection principles

Discussions on how principles should be refined and/or broadened are ongoing

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Agenda

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1. Avoidance of over-indebtedness

2. Transparent and responsible pricing

3. Appropriate collections practices

4. Ethical staff behavior

5. Mechanisms for redress of grievances

6. Privacy of client data

Client Protection Principles

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Agenda

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Now is a critical time to focus on client protection, for several reasons:

• Demands for accountability and transparency

• Microfinance crises in several countries

• Negative media attention regarding impact

• Public and governmental concern over high interest rates

• Rapid growth, rising competition, and new players

Why Now?

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Agenda

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Feedback from ParticipantsWhat challenges have you faced?• Over-indebtedness• Transparent pricing• Client complaints• Confidentiality …

How does the competitiveness of your local market affect your strategies and decisions?

What do clients appreciate most about your institution? What would they change if they could?

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Agenda

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Smart Campaign Encourages MFIs to “REACT”

Reach out – endorse the Campaign

Engage – learn, train, and self-assess

Assess – commission an external evaluation

Change – pilot projects, share experience,

utilize available technical tools

Track – report and receive certification

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Endorsing is very easy!

Go to our website (smartcampaign.org)

to find:• A diverse set of ways that you can

support the Campaign• Options to recieve more information,

tools, and other instruments to implement the Client Protection Principles.

Respond: Endorse the Smart Campaign

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Educate: Training Presentations

Networks can train MFI managers

MFI managers can train staff

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Educate: Institutional Self-AssessmentGetting Started Questionnaire:

Client Protection Self Assessment for Microfinance Institutions

ClientProtectionPrinciple

Indicators

Explanationof indicators Your score

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Educate: Institutional Self-AssessmentsSample results from Getting Started questionnaire:

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Assessors certified by the Smart Campaign provide objective and accurate evaluations

Smart Certified Assessors trained in Nairobi

Assess: Evaluation from a Smart Certified Assessor

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Change: Technical Tools Available for Download

Dozens of tools are publicly available:

Assessment guides

MFI toolkit

Network & association toolkit

SmartNotes case studies

Detailed information on each of these is available on the Smart Campaign

website

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Change: Examples of Technical Tools

How to Develop an Institutional Code of Ethics

Protecting Clients in the Individual Lending Process

Implementing Client Protection: A Guide for Investors

And many more!

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Change: Share and Disseminate Best Practice Examples

Example of a“SmartNote” case study on client protection

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Track: Monitor ChangeThrough the MIX Market Social Performance Standards (SPS)

Report, an MFI measures and monitors its overall social performance through a set of social performance indicators—

including client protection indicators.Sample from the MIX SPS Report:

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• The evolution of the principles• Certification of client protection

practices

Future of the Client Protection Principles

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Agenda

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Summary:• The Smart Campaign is a global, industry-wide

initiative.• Improving on and promoting client protection is

an urgent need. • Client protection involves transparent,

responsible, and ethical practices that put clients’ needs first.• Many tools are available to help organizations

integrate and monitor good client protection practices.

Conclusion

Call to action

How can your organization get involved and support client protection in microfinance?

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Join the Campaign and Endorse the Principles of Client

Protection

Have questions? Want more information?

Contact the Smart CampaignEmail: [email protected]

Thank you!

Introduction to the principles of client protection to post

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