THE SMART CAMPAIGN€¦ · 15/05/2018 · The Smart Campaign is grateful to our supporters:...

THE SMART CAMPAIGNConsumer Protection Resource Kit

The Smart Campaign is the leading global voice on financial consumer protection and empowerment. We work globally to create an environment in which financial services are delivered safely and responsibly to low-income clients. As the world’s first financial consumer protection standard, the Smart Campaign influences the implementation of good consumer protection practices through key areas of work. In addition to elevating the client voice, convening partners to effect change at the national level, and supporting the implementation of consumer friendly financial regulation, we work hand in hand with financial service providers to understand the risks faced by vulnerable clients when accessing financial services, and to develop standards and solutions that take their interest into account. A key element for motivating change is to be able to measure and reward it. The Smart Certification program, launched in early 2013, accomplishes this.

Smart Certification provides an independent, objective seal of confidence that a financial institution is doing everything it can to treat its clients well and protect them from harm.Since the launch of certification 5 years ago, we have learned a lot. Over 130 FSPs have gone through certification missions. While most have passed after a making a few improvements to their practices, some needed a bit more time to meet the certification standards. Others decided to put certification on hold to allow to make more significant improvements in a streamlined way, tying them to on-going operations. All can testify to the fact that Certification is a meaningful process and by no means a ‘check-the-box’ exercise. It entails a deep look one’s practices. Undergoing certification is a life changing journey.

Through this new series of tools, we want to share the experience of those who have gone through the process, how they have benefited, what they – and we – have learned along the way, and how this is shaping things moving forward.

Consumer Protection Resource Kit

Certification is extremely valuable for financial service providers. Drawing on our conversations with Smart Certified Institutions, we highlighted the main benefits of Certification – through their own lens. And while some may be intuitive, others (ranging from internally motivating staff to external recognition from regulators) may not. If you are a financial service provider wondering about the benefits of certification, don’t take our word for it. Get an inside look at what others had to say.

If you are a financial service provider interested in undergoing a certification, we invite you to hear what certified institutions have to say and why certification matters for financial service providers.

While Certification has tremendous value for financial service providers, clients are the ultimate beneficiaries. Clients of financial services face risks. They can get into too much debt, be taken advantage of, or sold the wrong services. Financial transactions can also be stressful for clients, especially for those at the base of the pyramid. Clients have the right to be treated fairly by the institutions they work with and should feel proud to bank with a Smart Certified institution, knowing that the institution is doing everything in its control to protect them. Check out why Certification matters for clients.

Others benefit, too. Investors value certification as demonstrates an organization’s commitment to its clients. Certification helps investors, donors, and regulators distinguish financial institutions that put clients first. By directing investments to certified institutions, an investment fund can send a strong message that it takes client protection seriously. The IDB, Deutsche Bank, FMO, and Oikocredit all look for the Smart Certificate as an important factor in selecting investees. Regulators value certification for its international relevance, transparent development, and contribution to market stability. Find out more about why Certification matters for investors and why Certification matters for regulators.

If you are ready to embark on the certification journey, there are a few things you should know. What is the typical path to certification? As Certification has grown more comprehensive, many financial institutions have indicated that the process has become more difficult to navigate. This tool will guide you through the various phases of the process and the variety of assessment options to improve practices and get ready for certification.

A certification mission typically entails a desk review and an on-site visit element. This tool explains the Certification Mission of the certification process and details how financial institutions can prepare and what they can expect during a certification mission.

Once you are certified, there are a number of ways in which you can publicize your certification. Conversations with certified financial institutions have revealed a large number of unique approaches developed by certified institutions to publicize their status. This tool details some of these best-practices and provides additional suggestions for newly certified financial institutions looking to promote their achievement.

Financial services providers can minimize harm to clients by implementing the seven Client Protection Principles (CPPs), a common, global framework for client protection. By becoming Smart Certified, an institution demonstrates that it puts the CPPs into practice. When institutions follow the Client Protection Principles, the whole sector benefits including financial service providers, investors, regulators, and most of all, clients.

THE SMART CAMPAIGNThe leading global voice on financial consumer protection and empowerment

The Client Protection Principles

The Client Protection Principles form the bedrock of the Smart Campaign. Developed in concert with providers, international networks, microfinance and banking associations, these principles represent a global consensus on what constitutes fair treatment of clients.

Appropriate Product Design and Delivery

Prevention of Over-indebtedness

Transparency

Responsible Pricing

Fair and Respectful Treatment of Clients

Privacy of Client Data

Mechanisms for Complaint Resolution

What We Do

Smart Certification: The Smart Campaign’s Certification program allows financial institutions to demonstrate their adherence to the Client Protection Principles through a rigorous and objective third-party evaluation. Accredited Certification Bodies conduct Certification Missions that confirm an organization’s commitment to putting its clients first.

Building Coalitions for Change: The Smart Campaign works across the entire financial inclusion sector to help financial service providers understand client protection, uncover their gaps and make positive changes. The Model Legal Framework translates the Campaign’s standards into regulation, while the technical support we provide to financial service providers, investors and networks infuses client protection into the DNA of the financial inclusion industry. Recently, the Campaign formed a community of practice called FintechProtects to engage providers and build industry will and know-how to address emerging consumer risks in digital financial services.

Tools Development and Dissemination: The Smart Campaign and its partners have developed a host of tools that help financial institutions implement the Client Protection Principles. These tools range from diagnostics to guidelines and are available at www.smartcampaign.org/tools-a-resources.

Join the Conversation

FacebookSmart Campaign

Twitter@SmartCampaign_

YoutubeSmartCampaign

Websitewww.smartcampaign.org

Contact Us

[email protected]

The Smart Campaign works globally to create an environment inwhich financial services are delivered safely and responsibly to low-income clients. As the world’s first financial consumer protection standard, the Campaign maintains a rigorous certification program, elevates the client voice, and convenes partners to effect change at the national level. Nearly 100 financial institutions, collectively serving more than 41 million people, have been certified for adhering to the Campaign’s industry-accepted consumer protection standards.

THE SMART CAMPAIGNThe leading global voice on financial consumer protection and empowerment

Get Involved

Understand the CPPshttp://bit.ly/SmartCampaignCPPs

Endorse the Campaignhttp://bit.ly/

SmartCampaignEndorsement

Join the FintechProtects Community of Practice

http://bit.ly/FintechProtects

Get Certifiedhttp://bit.ly/SmartCertification

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1101 15th Street NW, Suite 400, Washington, DC 20005 USA | Tel 202.393.5113 Fax 202.393.5115 | www.smartcampaign.org

Why Client Protection Matters Now

Protecting clients is the right thing to do. Smart Campaign endorsers believe that protecting clients is not only the right thing to do, but also the smart thing to do. When they deliver transparent, respectful and prudent financial services, financial service providers help to ensure that their clients benefit from using financial services and build a foundation for healthy operations in the future.

We know more than ever before about how to keep clients safe. After decades of experience, the financial inclusion industry is keenly aware that predatory providers, abusive practices, weak regulations and inappropriate products can create lasting and sometimes devastating harm. And in an increasingly interconnected world, clients are speaking out about what they need to access economic opportunity. The Smart Campaign is helping to define good business practices, and we know it can make a critical difference in the lives of clients.

The market is more complex than ever. Today, financial service providers serving low-income populations are more likely to offer not just credit, but also savings, payments, insurance and a wide range of digital services. Value chains are more diffuse which complicates accountability for client well-being.With this expansion, brand new client protection issues are emerging and the Smart Campaign’s approach is evolving to encompass them.

Investors and regulators need to protect clients. Investors and governments increasingly rely on Smart Certification as an emblem of client protection and empowerment. Close to half of Smart Certified institutions indicated that their certification helped them attract investment. Investors feel confident that Smart Certified institutions represent a sustainable investment, minimize their exposure to risk, and protect their clients. In addition, 80% of institutions said that their certification helped them comply with local regulation.

Major Funders

The Smart Campaign is grateful to our supporters: Mastercard Foundation, Deutsche Bank, MetLife Foundation, Credit Suisse, the International Finance Corporation, and many others.

Research and Standards Setting: The Smart Campaign’s research and publications highlight obstacles to client protection around the world. Among other topics, the Campaign’s work has highlighted best practices for responsible agent management in India, enumerated the client protection risks and opportunities in mobile consumer credit, amplified the voices of clients around the world, and explored what happens to clients who default. The findings help financial service providers, academics, policymakers and others implement new approaches to protecting economically vulnerable consumers. It also helps to set the bar for what should be expected from financial service providers in terms of good practices that protect their clients.

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From Our Supporters

”My clients are the reason I’ve joined this global effort.”

- Loan Officer, AMfB

”By empowering our clients, we ensure a stronger future

for our own institution.”

- Executive Director,Enda Inter-Arabe

”I want to safeguard our most important

investment—our clients.”

- CEO, BancoSol

Why Client Protection Matters Now

Protecting clients is the right thing to do. Smart Campaign endorsers believe that protecting clients is not only the right thing to do, but also the smart thing to do. When they deliver transparent, respectful and prudent financial services, financial service providers help to ensure that their clients benefit from using financial services and build a foundation for healthy operations in the future.

We know more than ever before about how to keep clients safe. After decades of experience, the financial inclusion industry is keenly aware that predatory providers, abusive practices, weak regulations and inappropriate products can create lasting and sometimes devastating harm. And in an increasingly interconnected world, clients are speaking out about what they need to access economic opportunity. The Smart Campaign is helping to define good business practices, and we know it can make a critical difference in the lives of clients.

The market is more complex than ever. Today, financial service providers serving low-income populations are more likely to offer not just credit, but also savings, payments, insurance and a wide range of digital services. Value chains are more diffuse which complicates accountability for client well-being.With this expansion, brand new client protection issues are emerging and the Smart Campaign’s approach is evolving to encompass them.

Investors and regulators need to protect clients. Investors and governments increasingly rely on Smart Certification as an emblem of client protection and empowerment. Close to half of Smart Certified institutions indicated that their certification helped them attract investment. Investors feel confident that Smart Certified institutions represent a sustainable investment, minimize their exposure to risk, and protect their clients. In addition, 80% of institutions said that their certification helped them comply with local regulation.

Major Funders

The Smart Campaign is grateful to our supporters: Mastercard Foundation,Deutsche Bank, MetLife Foundation, Credit Suisse, the International Finance Corporation, and many others.

Research and Standards Setting: The Smart Campaign’s research and publications highlight obstacles to client protection around the world. Among other topics, the Campaign’s work has highlighted best practices for responsible agent management in India, enumerated the client protection risks and opportunities in mobile consumer credit, amplified the voices of clients around the world, and explored what happens to clients who default. The findings help financial service providers, academics, policymakers and others implement new approaches to protecting economically vulnerable consumers. It also helps to set the bar for what should be expected from financial service providers in terms of good practices that protect their clients.

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From Our Supporters

”My clients are the reason I’ve joined this global effort.”

- Loan Officer, AMfB

”By empowering our clients,we ensure a stronger future

for our own institution.”

- Executive Director,Enda Inter-Arabe

”I want to safeguard our most important

investment—our clients.”

- CEO, BancoSol

FOR MORE INFORMATION, visit www.smartcampaign.org or email [email protected].

What Certified Institutions Say

Smart Certification Is Objective“FINCA Kosovo staff overwhelmingly viewed Smart Certification as a helpful, objective, third-party diagnostic and assessment of our practices… There isn’t anything we would change about Smart Certification.”FINCA KOSOVO HEAD OF LEGAL

Smart Certification Helps Deliver Client-Focused Products

“When you are certified, the client knows what he’s getting: the process of delivery respects the client, the product is client-friendly, you don’t over-indebt the client, the process of engagement is not hostile. The client knows that what you see is what you get.”GROOMING CENTRE NIGERIA, GOVERNING COUNCIL REPRESENTATIVE

Smart Certification Attracts Investors“Certification separates us from our competitors when we speak to investors. They immediately know we’re a legitimate organization and that we play by international rules.”FINCA KYRGYZSTAN MANAGER

Smart Certification Helps Financial Institutions Affirm Their Client Focus

“For ASKI, the Smart Certification helped us streamline our internal processes to serve our clients better. Beyond the national and international recognition, we appreciate the mentoring and development process that we went through to make sure all our systems are client-responsive and client-centric.”ASKI PHILIPPINES MANAGER

Smart Certification Motivates Continuous Improvement

“Certification helps us improve our service to clients, and clients appreciate that. They feel [that they are] treated as equal partners, and [they] better understand their obligations. The certificate gives [financial institutions] an obligation to be even better.”CEO, EKI BOSNIA AND HERZEGOVINA

The Smart Campaign’s Client Protection Certification program helps financial institutions demonstrate their commitment to delivering high quality products that help their clients. We know that Smart Certification works because Smart Certified Institutions are the best advocates for client protection.


YOUR FINANCIAL INSTITUTION IS SMART CERTIFIED

Here’s Why It Matters to You

Products That Fit Your NeedsThe products are designed to fit your life. They’re simple to understand and respect you as an individual with unique needs and characteristics. They’re crafted to make you better off.

Products That Won’t Force You in Over Your HeadYou try hard to be responsible with managing your money and your financial institution is here to help. They won’t force you to take on debt that you’re not ready for.

Products You Can UnderstandYour financial institution won’t try to confuse you with fine print or legal language. What you see and what you hear is what you’ll get.

Products You Can AffordYou work hard for your money and think carefully before you spend it. Your financial institution charges market rates for its products and services.

Treating You FairlyYour financial institution cares about you. It has committed to treating you fairly and with the respect you deserve.

Protecting Your DataYour private information is important to you and your financial institution keeps it safe. You can approve how your data is used and who has access to it.

Make Your Voice HeardNobody is perfect. That’s why your institution has clear information on how to contact someone if something goes wrong. (Or if something goes right!)

The Smart Campaign embodies a set of core principles for the treatment of clients. Your financial institution is certified by the Smart Campaign as an organization that protects its clients’ rights. This means that the way they do business conforms to international best practices and keeps you safe.


CERTIFICATION:

Tips for Investors

Join a Growing Group of Leading Responsible InvestorsNumerous investors, including FMO, IFC, Incofin, Triple Jump, NMI, Oikocredit, SIDBI, and OPIC have encouraged their partners to become certified, whether by offering preferential rates, sponsoring certification missions, or offering new funding streams. In a survey conducted by the Smart Campaign in December 2016, 44% of certified financial institutions indicated that they were able to capitalize on their certified status to attract additional investor interest. 20% gained access to new funding streams, while 12% secured preferential rates from investors.

Reduce Risk & Increase Peace of MindOver 75% of Smart Certified institutions received formal or informal commendation from their supervisory authority. Your investment in a Smart Certified financial institution is subject to less political risk. Investing in a Smart Certified institution offers you peace of mind that your partner is living up to its mission and values and has client protection embedded into its DNA.

Increase Long-Term DividendsSmart Certified institutions prioritize client protection long after they’ve received their certificate. 95% of certified institutions said that they evaluate new policies according to whether or not they comply with the Client Protection Principles.

Stand ApartIn a rapidly evolving sector featuring unreliable and short-lived institutions, Smart Certified institutions stand out as sustainable, serious, and committed organizations. They have undergone an extensive audit by a third-party certifier and recruited a committed management dedicated to treating clients fairly.

Smart Certification represents the only truly global seal of an organization’s commitment to protecting economically vulnerable clients. Financial service providers around the world are held to the same set of exacting standards.

You can also contribute to the adoption of more responsible practices by supporting the development of tools and the evolution of standards to cover new business models and financial products.

Investors are supporting a wide range of institutions offering financial services to vulnerable people. The range and complexity of the products offered is increasing, from credit, savings, insurance, and payments to a wider range of digital products. In this evolving marketplace, investors are more attuned than ever before to ensuring that financial services do no harm to vulnerable consumers.

Help create a safer and more sustainable world for investors, financial service providers, and clients alike. Take action by endorsing the Client Protection Principles, supporting your investees’ path to certification, financially incentivizing client protection, and investing in Smart Certified institutions.

Publicizing Your Smart Certification

Congratulations on receiving your Smart Certification! We understand that this achievement represents the fruits of your efforts over many months. It is the result of your extensive dedication in time, energy and financial resources to ensuring that your clients are protected and well treated as they engage with their lender. We understand you are very eager to share your achievement with your stakeholders and this document will help you explore new ways to gain maximum publicity.

Ultimately, every Smart Certified institution is different. As such, you and your colleagues will know best how to speak about your certification and which stakeholders to communicate with first. What follows are some suggestions, collected from Smart Certified financial institutions around the world, that have served our partner institutions well. Please feel free to modify or adopt them to your local context. If you encounter a new strategy that delivers results, please don’t hesitate to share it with us. We would love to learn from your experience!

Bayport Botswana Wears Certification In March 2015, Bayport Botswana became the first sub-Saharan African financial institution to secure certification. To celebrate this achievement, Bayport launched a publicity campaign to ensure clients heard about their certification and knew why it matters. In addition to developing brochures, pamphlets and launching a direct outreach campaign, Bayport created vests for its loan officers featuring the Smart Campaign logo. The vest instructed clients to ask their loan officer about Smart Certification. As a result, Bayport created a wearable tool that encouraged conversations about its own achievement. Bayport loan officers noticed a massive rise in conversations about certification, allowing the organization’s representatives to boast to clients directly about what it was doing for them.

Microinvest Moldova Reaches Out Microinvest Moldova secured its Smart Certification in September 2015, becoming the first financial institution in country to do so. At the time, clients were not intimately familiar with the Smart Campaign’s brand and what it signified. Moreover, the Moldovan market was saturated with financial service providers, offering limited opportunity to compete on price. Microinvest launched an outreach campaign tailored for clients to distinguish the organization from competitors based on its product quality. Pamphlets were dsiplayed in Microinvest branches and loan officers were instructed to speak about certification. A description of Smart Certification was added prominently to the "About Us" and “Business Loans” sections of the financial institution's website. Loan officers were instructed on how to speak about Smart Certification. The result: some clients have begun to ask about the Smart Certification. Said a Microinvest representative, “Our certification is used as an argument in discussion with the client. Every institution tries to distinguish oneself based on quality in Moldovan market. In discussion with clients, we leverage our certification. We say that we have certain criteria we need to respect. It’s another argument to separate us from other organizations that merely claim they care about clients.”

FINCA Kosovo Hosts a Celebration Operating in a relatively small market, FINCA Kosovo was keen to ensure that its partners understood the impact of its achievement when it secured Smart certification. The organization's marketing budget was quite limited, so advertising in newspapers and online portals was not an option. Press releases in Kosovo are rarely picked up. To overcome this limitation, the financial institution organized a cocktail reception to thank its partners for their support. At the reception, loyal clients were invited to mingle with regulators and investors. During the event, clients were invited to reflect on FINCA Kosovo’s achievement and investors and regulators witnessed first-hand the value of Smart Campaign’s client protection certification from the people it was meant to protect.

The first step in the Smart Certification process is endorsing the Client Protection Principles, which cover the main risk areas that vulnerable clients are subject to when accessing and using financial services. Commitment to responsible delivery of financial services is an important, yet not sufficient step towards improving practice and protecting clients. The standards and indicators your institution will be asked to account for during the certification process are based on the Client Protection Principles.

Commit

Once you have committed to improving practices to better serve clients, you are strongly encouraged to conduct an assessment of your client protection practices. An assessment will evaluate how well you are meeting standards of client protection by setting a baseline, minimizing your risks, and by preparing your institution for the certification mission.

Assess

Your completed assessment will give you a better understanding of how your policies and practices match up against the Client Protection Principles. During this period, you will have the opportunity to identify problems, gather resources and address any gaps. The Smart Campaign is here to help—our tools database provides a wide selection of guides, case studies and technical manuals. Additionally, you may want to recruit the assistance of a Smart-approved trainer.

Improve

Once you are ready to demonstrate your full adherence to the Client Protection Principles, you can reach out to any one of the accredited Certification Bodies to negotiate the timing and cost of your Certification Mission. Following the successful completion of your Certification Mission, you will be provided with an official Smart Campaign Certification attesting to the strength of your client protection practices.

Demonstrate

Flip for more details:

The Pathway to CertificationKeeping clients firstin financial inclusion

Assessment Options

Depending on the time and resources available, you may want to do the assessment in-house or seek external support. Here are some assessment options you can consider:

Self-AssessmentA Self-Assessment is completed internally by staff at your institution using our Getting Started Questionnaire. For the Self-Assessment to succeed, your internal assessment team should be:

Adept at the Smart Campaign’s Client Protection Principles and implementing standardsEmpowered to interview staff, management and the Board of DirectorsAuthorized to assess other departments, such as human resources, accounting, underwriting, auditing, etc.

Note: While Self-Assessments may save you money, they may prove to be less accurate as institutions tend to review themselves more favorably than unbiased third-party assessors.

Accompanied Self-Assessment An Accompanied Self-Assessment is completed by your staff and a consultant trained in the Smart Assessment methodology to guide you through the process. This consultant is carefully vetted by the Smart Campaign and can guide your institution on accurately reviewing its policies and practices, providing guidanceas needed.

External Assessment An External Assessment leverages the full power of the Smart Campaign’s highly-trained Smart Assessors to create a mock certification. Similar to an actual Certification Mission, Smart Assessors will conduct a thorough desk review and a field visit, scoring your institution on each indicator. Each assessment team is composed of one experienced lead assessor and one support assessor.

After the field visit, the assessment team will deliver a detailed External Assessment Report that anaylzes your policies and practices. This report will feature a quantitative analysis of your institution’s pricing, a full scoring against the client protection standards and, where necessary, present a roadmap for improvement. This report is confidential—it’s for you to help your institution improve its practices.

For More InformationVisit: www.smartcampaign.org/certificationEmail: [email protected]

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http://smartcampaign.org/certification


1. PreparationSign Contract with an Accredited Certification Body: Once you are ready to demonstrate your full adherence to the Smart Campaign’s Client Protection Principles, you can reach out to any one of Smart’s accredited Certification Bodies to negotiate the timing and cost of your Certification Mission. Smart’s Certification Bodies are specially trained in assessing financial service providers and will guide your organization through the process. Once you have contacted an accredited Certification Body, they will let you know which documents are required for the evaluation.

Desk Review: During the desk review, the accredited Certification Body will conduct a thorough evaluation of your institution’s documents, including financial statements, board meeting notes, codes of conduct and others, for compliance to the Client Protection Standards. The goals of the desk review are to give the certifying body a thorough grounding in your institution’s policies and practices and to identify and address performance issues prior to the on-site visit.

2. On-Site VisitOnce the preparation phase is complete, an audit will be scheduled, which may include a review of the submitted documentation, as well as interviews with selected stakeholders. During the on-site visit, your accredited Certification Body will fill in any outstanding knowledge gaps by speaking with your institution’s representatives. The accredited Certification Body will look to you to help arrange conversations with senior leadership, branch representatives, clients and others.

3. Post-Visit AnalysisFollowing the completion of the on-site visit, the accredited Certification Body will carefully review all material gathered and deliver an input sheet scoring your institution against the Client Protection Standards. If your institution passes every standard, your institution will receive the Smart Certification and the process will be complete. However, if your institution does not immediately pass, a brief explanation will be provided. Non-conformities can be addressed through three possible paths, subject to the discretion of the accredited Certification Body:

Progress Period: In this period, your institution will have a four-month window to put in place corrective measures to meet the Client Protection Standards, using a certification report that identifies your institution’s deficiencies. Certification will be announced when these measures are complete. This review is done remotely and typically takes 1.5–2 days of effort for one analyst from the accredited Certification Body. If the verification entails an additional on-site visit, there will be additional costs.

Streamlined Certification: If your institution passes a large majority of the assessment and, in the opinion of the accredited Certification Body, your institution has strong prospects to meet all the indicators within four months, you can receive certification immediately. Your institution will then have four months to comply fully. If this does not occur within this timeframe, certification will be withdrawn. In this scenario, the aforementioned assumption of 1.5–2 days of effort and additional field costs for one accredited Certification Body analyst still applies.

Longer-Term Corrective Actions Requiring New Certification Mission: The accredited Certification Body may recommend that institutions with a large number of gaps opt-out of the progress phase and implement longer-term corrective actions. In this case, you would be allowed to re-apply for a Certification Mission with the same accredited Certification Body within any timeframe. If your institution has not passed certification and wishes to re-apply with another accredited Certification Body, you must wait four months.

4. Final ReviewThe four-month period is followed by a final review of your policies and practices for compliance to the Client Protection Principles and their corresponding standards, indicators and compliance criteria.

5. Certification AwardFollowing the successful completion of your Certification Mission, you will be provided with an official Smart Campaign Certification attesting to compliance with the Client Protection Principles and the strength of your client protection practices. A Smart Campaign representative will be in touch to discuss how to best publicize your certification.

6. Follow-OnOnce your institution obtains Smart Certification, the Smart Campaign will continue its support of your client protection efforts. The Smart Campaign will remain available to answer any questions, assist you in sharing the news with your stakeholders, and supporting your future efforts to keep your clients safe.

YOUR GUIDE TO A

Certification Mission


CERTIFICATION:

Tips for Regulators

Smart Certification Evolves with the MarketThe financial inclusion sector has come a long way since its inception. Financial institutions serving economically vulnerable populations are now more likely to offer savings, payments, insurance and digital services. As more and more financial institutions under your supervision begin to offer a diverse array of products, the Smart Campaign’s standards will encompass them. 40% of certified institutions offer savings, and approximately a quarter offer insurance and digital financial services.

Smart Certification is Important to All Types of OrganizationsMarkets are diverse and so are Smart Certified institutions. Smart Certification is the only globally recognized emblem of client protection: Certified institutions are located all over the world — from Africa to Latin America, Europe, Middle East North Africa and Asia. Institutions serving less than 10,000 clients and those with over 1 million clients have successfully become certified. Banks, NGOs, and cooperatives count themselves among the number of certified institutions.

Smart Certification Makes for Better and More Stable Institutions80% of certified institutions say that their certification helps them adhere to regulations. 86% say it helped them understand and anticipate client risks. 93% believe that certification helped them reshape their culture around a social mission and core values.

Regulators Around the World Care About Smart Certification25% of Smart Certified institutions received public acknowledgement from their regulator or supervisor. Whether by presenting certified organizations with an award or publicizing their achievement, regulators are recognizing that a market with certified institutions is a safer market. 50% of Smart Certified institutions received informal commendation from their regulator.

Instituting Client Protection Principles Into Regulation is Now Easier Than EverThe Model Legal Framework (MLF) provides regulators with a powerful tool to translate Client Protection Principles into concrete and specific regulation. The MLF is available at http://bit.ly/ModelLegalFramework.


THE VALUE OF

Smart Certification

In 2016, 37 of the Smart Certified institutions answered a questionnaire about how their institution and clients have benefited from Smart Certification.

Certification Benefits

86% of institutions agree certification has helped them better understand client risks.

96% of institutions agree certification has helped them prioritize client protection.

93% of institutions agree certification helped them reshape the institution’s culture around its social mission.

Certification Costs

80% of institutions believe the cost of certification is appropriate.

60% of certified institutions achieved certification without retaining external technical assistance.

82% of institutions believe the cost of certification was compensated by value received.

Respondents’ ProfileOf the 37 institutions that responded to the survey, 85% of them were microfinance institutions. The largest group of respondents (40%) serve between 10k and 50k clients, and most respondents are located in Europe, Central Asia, and Latin America.

Who Values Certification

60% of institutions have seen themselves highlighted in local media due to certification.

50% of institutions indicate that regulators took formal or informal notice of certification.

60% of institutions said clients take notice of their certification.

Smart Certification

Smart Certification is a way for financial service providers to demonstrate their commitment to client protection. Certification is awarded to financial service providers that complete an independent, third-party evaluation of their policies and practices. Smart Certified institutions know with confidence that the way they do business accords with global best practices for protecting economically vulnerable clients. As the sector has evolved, so too has Smart Certification. Today, the program helps financial service providers offering credit, savings, insurance, payments and digital financial services treat their clients with the respect and dignity that they deserve.

Why Certification Matters

Smart Certification represents the only truly global seal of an institution’s commitment to protecting economically vulnerable clients. Financial service providers worldwide are held to the same set of exacting standards.

96% of institutions agree that certification has helped them prioritize client protection and 93% say that it helped them reshape the institution’s culture around its social mission.

Investing in a Smart Certified institution provides long-term dividends: Smart Certified institutions prioritize client protection long after they have received their certificate. 95% of Smart Certified institutions have said that they evaluate new policies according to whether or not they comply with the Client Protection Principles.

Most Smart Certified institutions said that their regulators have taken notice of their newly certified status. 44% of Smart Certified institutions indicated that they were able to capitalize on their certified status to attract investor interest not previously present.

What Types of Institutions Can Be Certified?

Financial institutions that provide services to lower segments of the market and/or financially-excluded populations are eligible for Smart Certification. This includes institutions of any legal form, including, but not limited to banks, finance companies, NGOs and credit unions.

Join the Conversation

FacebookSmart Campaign

Twitter@SmartCampaign_

YoutubeSmartCampaign

Contact Us

[email protected]

The Smart Campaign works globally to create an environment inwhich financial services are delivered safely and responsibly to low-income clients. As the world’s first financial consumer protection standard, the Campaign maintains a rigorous certification program, elevates the client voice, and convenes partners to effect change at the national level. Nearly 100 financial institutions, collectively serving more than 41 million people, have been certified for adhering to the Campaign’s indsutry-accepted consumer protection standards.

SMART CERTIFICATIONKeeping clients firstin financial inclusion

“Certification is about financial institutions actively demonstrating their

commitment to the people they serve and microfinance stakeholders working

towards a more stable industry.”

Isabelle Barrès,Director, the Smart Campaign

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http://bit.ly/SmartCampaignCPPs

http://bit.ly/SmartCampaignCPPs

How to Get Certified

The first step in the Smart Certification process is endorsing the Client Protection Principles, which cover the main risk areas that vulnerable clients are subject to when accessing and using financial services. Commitment to responsible delivery of financial services is an important, yet not sufficient step towards improving practice and protecting clients. The standards and indicators your institution will be asked to account for during the certification process are based on the Client Protection Principles.

Once you have committed to improving practices to better serve clients, you are strongly encouraged to conduct an assessment of your client protection practices. An assessment will evaluate how well you are meeting standards of client protection by setting a baseline, minimizing your risks, and by preparing your institution for its certification mission. Depending on the time and resources available, you may want to do the assessment in-house or seek external support.

Your completed assessment will give you a better understanding of how your policies and practices match up against the Client Protection Principles. During this period, you will have the opportunity to identify problems, gather resources and address any identified gaps. The Smart Campaign is here to help—our tools database provides a wide selection of guides, case studies and technical manuals. Additionally, you may want to recruit the assistance of a Smart-approved trainer.

Once you are ready to demonstrate your full adherence to the Smart Campaign’s Client Protection Principles, you can reach out to any one of the Accredited Certification Bodies to negotiate the timing and cost of your certification mission. Following the successful completion of your certification mission, you will be provided with an official Smart Campaign Certification attesting to compliance with the Client Protection Principles and the strength of your client protection practices.

Benefits of Certification

86% of institutions agree certification has helped them better understand

client risks.

96% of institutions agree certification has helped them prioritize client

protection.

93% of institutions agree certification has helped them reshape the

institution’s culture around its social mission.

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Who Values Certification

60% of institutions have seen themselves highlighted in local

media due to certification.

50% of institutions indicate that regulators took formal or informal

notice of certification.

60% of institutions said clients take notice of their certification.

Take the First Step

Learn more about Smart Certification at www.smartcampaign.org/certification.

http://www.smartcampaign.org/certification

Ujjivan(India)

Smart Certification played a critical role in helping Ujjivan evolve from a microfinance institution to a small finance bank with a successful IPO.

WHY SMART CERTIFICATION

Smart Certification is a way for financial service providers to demonstrate their commitment to client protection. To become certified, an institution must complete an independent, third-party evaluation of its policies and practices. Certification is the only truly global seal of an institution’s commitment to protecting economically vulnerable clients.

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that has to stay. Every institution needs to be recertified to make sure they are on track.”

A combination of factors drove Ujjivan to seek Smart Certification: the urge to improve client protection mechanisms, the desire to implement international best practices, and the need to differentiate itself from competitors. Following the 2010 crisis in the microfinance industry in the Indian state of Andhra Pradesh, Ujjivan strengthened its client protection practices and implemented various pro-customer initiatives, including educating customers on over-borrowing and ghost lending. The institution also introduced additional measures for transparency, clearly specifying terms and conditions for loans.

Some of the benefits to Ujjivan as a result of Smart Certification include:

•Improved customer service. As a result ofSmart Certification, Ujjivan improved its client complaint and resolution processes. Ujjivan ensured that customer service representatives in the field were talking to clients, introducing themselves, and informing clients about their rights to complain. Ujjivan also expanded the scope of work of their internal auditors to verify that client complaints were resolved in a timely fashion. “Certification forced us to develop formal policies, processes and documentation around some issues like client privacy and rescheduling,” said a senior manager.

About UjjivanUjjivan, a pioneer of urban microfinance in India, was one of the first institutions in the world to become Smart Certified. Since its inception in 2005, Ujjivan has been committed to providing a full range of financial services to the economically active poor who are not adequately served by traditional financial institutions. Today, Ujjivan offers credit, savings and life insurance products to a clientele of mostly low-income women and microentrepreneurs.

Ujjivan has continuously evolved as an organization over the past decade to achieve greater scale while staying true to its mission. By 2013, Ujjivan had one million borrowers on its books and transitioned into a Non-Banking Financial Company. Two years later, Ujjivan transformed into a bona fide Small Finance Bank. As of June 2017, Ujjivan Small Finance Bank launched its first five bank branches, scaled to over 3 million clients and 10,000 employees, and managed an outstanding portfolio of USD $1.3 billion.

Benefits of CertificationUjjivan received its initial certification in 2013, and recertified in 2015 to re-emphasize the centrality of client protection in the organization.

“We went for re-certification as it was important that the culture of client protection continued,” Samit Ghosh, Managing Director and CEO, said. “We didn’t want this to be a one-shot exercise. It is an ongoing exercise

“Smart Certification helped us raise capital and transform into a bank. Among regulators, people feel Ujjivan is one of the better institutions, with ethical values and good governance. Smart Campaign helped in building this very important part of Ujjivan’s image.”

SAMIT GHOSH, MANAGING DIRECTOR AND CEO, UJJIVAN INDIA

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•Focus on clients in time of crisis. In November 2016, the government of India announced a policy of demonetization to combat corruption and illegal activity. As a result, currency notes of Rs 500 and Rs 1000 were declared illegal tender. Since a vast proportion of transactions among low-income people took place at this level, the microfinance industry suffered as the shortage of cash led to mass defaults on loan payments. However, Smart Certification helped Ujjivan remain steadfast in its principles of client protection and transparency, even during a crisis that incentivized cutting corners. “We could have veered like many of our competitors and become very aggressive in collection,” Samit Ghosh, Managing Director and CEO, said. “Respecting customers is very important whether they are defaulting or not. That culture helped us get through this period of crisis for the microfinance industry.”

•Market differentiation. “Smart certification is a kind of testimony to good practices,” Zeeshan Ali, Ujjivan’s National Products Manager, said. “Our clients belong to economically weaker sections and there are chances they could be cheated. There are chances that products and services are mishandled. Smart Certification is a very important tool that would help differentiate the best from the rest.”

•Team-building and brand equity. The team at Ujjivan claims that Smart Certification is a matter of pride for them and drives them to work harder and provide better services to their clients. From a branding point of view, Smart Certification has contributed immensely to Ujjivan’s image and reputation, even while it has grown in size and scope. Smart Certification features prominently in the institution’s brand and messaging.

The Client PerspectiveCustomer service is a key differentiator, which was fortified through Smart Certification. Ujjivan now has a separate Service Quality department with dedicated customer care representatives at each branch who are responsible for proactively seeking client feedback and resolving client complaints. Products can always be replicated, but not customer service is a common refrain at Ujjivan.

Sulthana, who owns a small shop, explained how Ujjivan was helpful to her during the demonetization crisis: “When the demonetization happened, we had old notes and weren’t able to repay the loan. We told Ujjivan that we needed a few more days to repay it. They were very considerate and understanding, spoke politely and gave us a few more days. Other places can be very aggressive in recovering loans.”

“Given the benefit Smart Certification has provided Ujjivan, I think every organization should opt for it and make it one of the universal gold standards of customer protection in the financial industry.”

RAJAT SINGH, HEAD OF STRATEGY AND PLANNING

THE SMART CAMPAIGN4

Smart Certification has also changed the way Ujjivan interacts with its peers as the institution is seen with greater respect. As one of the first institutions to become certified, Ujjivan’s status was elevated among other institutions inquiring about its experiences with Smart Certification.

Learn More About Smart CertificationSmart Certification provides an independent, objective seal of confidence that a financial institution is doing everything it can to treat its clients well and protect them from harm.

Learn more about the pathways to Certification and determine the best course of action for your institution at http://bit.ly/SmartCertification.

See more certification stories at www.smartcampaign.org.

Ujjivan’s customer retention rate is a point of pride for the organization. The team credits the institution’s client-centric methods, efficient services, and effective complaints mechanisms that were formalized and improved via Smart Certification.

The Stakeholder PerspectiveUjjivan believes that the principles of transparency and client protection that it absorbed through the Smart Campaign helped it successfully transform into a Small Finance Bank and smoothed the process with regulators.

“When a regulator issuing fresh licenses sees that an institution is certified for customer protection, it gives them a lot of comfort,” Samit Ghosh, Managing Director and CEO, said. “The stamp of being certified under Smart Campaign as well as the recognition by the Great Places to Work is in all our communications. When we did our IPO, we used the Smart Campaign logo in all our communications and in our advertisements.”

ABOUT THE SMART CAMPAIGN

The Smart Campaign works globally to create an environment in which financial services are delivered safely and responsibly to low-income clients. As the world’s first financial consumer protection standard, the Campaign maintains a rigorous certification program, elevates the client voice, and convenes partners to effect change at the national level. Nearly 100 financial institutions, collectively serving more than 41 million people, have been certified for adhering to the Campaign’s industry-accepted consumer protection standards.

“Ujjivan staff treats me with respect and fully cooperates with me. They have been very supportive regarding any issues or concerns. If there is an emergency and we are not able to pay on time, Ujjivan staff looks into the issue on a case-by-case basis and allows short grace periods so that the client does not feel forced.”

RAHMATHUNISA, FURNITURE SHOP OWNER

FINCA Kosovo

Smart Certification helped FINCA Kosovo cement its pro-client practices and achieve long-term sustainability after market crises and organizational restructuring.



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“At the end of the day it’s also a selfish need, because if we put clients’ interests first, it ultimately helps us reach financial sustainability and our goals,” added Florin Lila. “The client is the ultimate beneficiary of everything we do. That is our long-term strategy.” Accordingly, with the support of FINCA International, growing buy-in from local management, and external pressure from other certified financial institutions in the region, FINCA Kosovo achieved Smart Certification in 2016.

Benefits of CertificationFINCA Kosovo’s existing policies and practices were well-aligned with the Smart Campaign with regards to the treatment of clients — FINCA Kosovo scored 90 percent on its pre-certification assessment. However, despite its strong position leading up to certification, FINCA Kosovo found it still had much to gain from becoming certified. Here are some examples:

•Improved transparency and feedbackloops. While FINCA Kosovo performed very well in pre-certification, its client touch points was an area of relative weakness. By improving the transparency of contracts, collection processes, fee disclosures and interest rates, FINCA Kosovo made a giant leap forward in customer care best practices. FINCA Kosovo also standardized client data collection processes and clients’ opinions and experiences became part of future product modifications.

About FINCA KosovoPart of the global FINCA International network, FINCA Kosovo’s mission is to eliminate poverty through lasting financial solutions that help to create jobs and improve borrowers’ standard of living. FINCA Kosovo is primarily interested in reaching people who are underserved or not served by conventional banks. The financial institution focuses on the micro- and small-to-medium enterprise and agricultural segments, which comprise approximately two-thirds of its loan portfolio.

Since its inception in 2000, client well-being has been a core value of FINCA Kosovo. After roughly 10 years of continuous growth, FINCA Kosovo began facing significant challenges due to external market crises and operational issues. New management was brought in and the institution’s procedures and practices were overhauled. According to Eurasia Regional Director Florin Lila, rather than pursuing short-term results, FINCA Kosovo took the opportunity to restructure to make the institution sustainable in the long term and for the benefit of clients.

In 2008, FINCA International endorsed the Smart Campaign, affirming that the Client Protection Principles (CCPs) are the minimum standards to which FINCA subsidiaries should adhere. “The foresight of their founder, their board of directors, as well as their management team cemented all of FINCA Kosovo’s policies and procedures to have the best interests of clients at heart,” said Auberon Kelmendi, general counsel for FINCA Kosovo.

“The client is the ultimate beneficiary of everything we do. That is our long-term strategy. If we put clients’ interests first, it ultimately helps us reach financial sustainability and our goals.”

FLORIN LILA, EURASIA REGIONAL DIRECTOR, FINCA

FINCA KOSOVO CERTIFICATION STORY 3

•Data-driven product development. Influencedby Smart Campaign methodologies, as part of the product development process, FINCA Kosovo conducts regular client surveys. This helps to ensure that products and processes are tailored around the clients’ needs. For example, products that don’t fit the clients’ cash flow are not offered because FINCA Kosovo wants to ensure better, long-term client relationships and avoid putting clients in difficult debt situations.

•Strengthened employment practices. Internalhiring practices were also changed to ensure that recruitment efforts focused on candidates who value client treatment, honesty and transparency. Sanctions for staff who violate the code of conduct were formalized, with appropriate monitoring put in place.

•Strengthened staff engagement. Tools likethe CPPs helped staff to more easily identify product design flaws, and to address blind spots in the future. Certification helped to reinforce staff pride, satisfaction and motivation because they had an ethos upon which to base and improve their performance.

The Client PerspectiveFINCA Kosovo is a strong advocate for Smart Certification and client protection. Staff members discuss the institution’s certified status with clients and disseminate the news through advertisements, social media and in-person events.

“The microfinance institution is the family friend nowadays,” Muhamed Xhema, owner of a successful dairy farm said about his personal relationship with FINCA Kosovo. “Before you could borrow from a relative or a friend, but now we look to FINCA Kosovo. Whenever we needed something, they responded efficiently and we agreed on the amount before we signed the contract.”

Auberon Kelmendi, general counsel for FINCA Kosovo, reflected on the value of client protection. “FINCA Kosovo has always

embraced the Client Protection Principles and they are enshrined in our main documents,” he said. “The culture of protecting our clients was always there, however, it is cemented further with Smart Certification.”

“The information I received from FINCA staff was very clear, accurate and the response time was really short,” Qendresa Qerimi, a furniture shop owner said. “FINCA treats us very well as clients and our interests are well protected based on contracts we receive before entering into any agreements.”

The Stakeholder PerspectiveSmart Certification strengthened FINCA Kosovo’s relationship with the country’s central bank, which sent representatives to attend FINCA Kosovo’s Smart Certification announcement event. Their presence at the event helped to signal to the rest of the industry that Smart Certification is recognized by the country’s regulators.

Smart Certification also directly improved FINCA Kosovo’s relationship with lenders. FINCA Kosovo does not collect deposits, and so their financing model requires them to borrow money from investors that they then lend to clients. Staff indicated that not only have lenders expressed support for FINCA Kosovo’s Smart Certification, but that they’ve also begun to offer better loan terms to the institution as a result.

“The culture of protecting our clients was always there, however, it is cemented further with Smart Certification.”

AUBERON KELMENDI, GENERAL COUNSEL, FINCA KOSOVO

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MFIs in less developed markets so that they adhere to certain standards of client relationships,” Gupshai said.

Florin Lin indicated that both he and the CEO of the country’s other certified financial institution, AFK Microfinance, will continue to lobby the other association members to get certified. “If all major players are certified it will ultimately benefit the entire industry,” he said. “Clients will be more assured that the industry as a whole is making a partnership with them, and not just for short-term relationships.”




“Smart Certification creates a bridge between a lender and a borrower in many aspects,” Fisnik Këpuska, FINCA Kosovo’s Chief Financial Officer, said. “They get an assurance about how their funds will be used.” Smart Certification reassures lenders that an institution’s treatment of clients is fair and adequate, which helps create long-lasting positive relationships and improve the sustainability of the institution.

The benefits of FINCA Kosovo’s Smart Certification also extend to the broader microfinance industry. FINCA Kosovo is seen as a leader in Kosovo’s microfinance market. Not only has Smart Certification strengthened FINCA Kosovo’s position in the market as a socially responsible institution, it also sets a standard that its competitors will want to meet.

Asim Gupshai, director of Kosovo’s microfinance association, would like to see the central bank make Smart Certification mandatory for microfinance institutions in the country. He expects other institutions in the association to pursue certification. “It’s of extreme importance that we push



“When a financial institution makes the client the focus like FINCA does, I think it is of the utmost importance to undertake the Smart process because it is the way to make sure that all your products, processes and client services are built around the client. The institution will benefit because Smart will help to identify strengths and weaknesses.”

ADRIAN KASTRATI, ACTING CHIEF EXECUTIVE OFFICER

Pro Mujer Mexico

Smart Certification enabled Pro Mujer Mexico to live up to its values of empowering low-income women with high-quality, respectful and transparent services.



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Certification…not all institutions are able achieve it, so the certification allowed us to be elevated in the market, and it demonstrated our institutional strengths.”

While Smart Certification provides a competitive edge, allowing Pro Mujer Mexico to stand out in the Mexican market, they soon realized certification would also impact organizational operations in a positive and significant way. “Pro Mujer Mexico was already developing many practices of the Smart Campaign without knowing it,” according to Mr. Torres. “The certification process has meant the strengthening of client protection processes and formalization of many of them. We practiced them before, but certification has allowed us to align them and give them a more formal procedure.”

Additional benefits of Smart Certification include:

•Standard formal policies. Through certification, Pro Mujer Mexico replaced institutional guidelines with specific protocols and policies regarding client protection. This ensures that even if institutional leadership changes, clients will remain protected.

About Pro Mujer MexicoIn 2013, Pro Mujer Mexico was the first institution in Mexico to be awarded Smart Certification. Since its founding in 2011, Pro Mujer Mexico has grown to include 37 branches across eight states serving nearly 50,000 clients. 97 percent of its clients are low-income women entrepreneurs. The mission of Pro Mujer Mexico is to empower low-income women so they can achieve their full potential, and it envisions a Latin America where all women prosper.

Pro Mujer Mexico offers three main products to its clients: credit, financial education, and preventative healthcare services. By providing a combination of financial and non-financial services, Pro Mujer Mexico aims to support not only its clients’ bottom-line, but also their well being. Pro Mujer Mexico also plans to offer savings accounts in the near future, furthering its mission of empowering clients.

Benefits of CertificationPro Mujer Mexico initially pursued Smart Certification to distinguish itself from competitors in the market, as Smart Certification Manager José Osinaga Torres explains: “It is not easy to obtain Smart

“Smart Certification is the first step in measuring your practices and improving upon them. We want to see all women thrive and feel valued.”

RODOLFO MEDRANO, GENERAL DIRECTOR, PRO MUJER MEXICO

PRO MUJER MEXICO CERTIFICATION STORY 3

•Improved loan approval process. Pro MujerMexico previously used a simple loan approval process that did not require a credit check through the national credit bureau. As a result of Smart Certification, Pro Mujer Mexico now screens prospective clients through the credit bureau and limits the amount of debt they may carry before approving their loans.

•Expanded customer service. Complaintsresolution, technical assistance and general customer service were enhanced with Smart Certification. For example, Pro Mujer Mexico expanded its customer service network, quadrupling its call center staff and creating a smartphone app for customers to interact directly with loan officers. With these changes, Pro Mujer Mexico is more accessible than ever.

•Strengthened client engagement. Pro MujerMexico also incorporated the Client Protection Principles (CPPs) into its financial education trainings for clients, thereby directly improving their skills in this area. By engaging both staff and clients around client protection issues, Pro Mujer Mexico is maximizing the impact of its certification.

•Alignment of mission and practice.Certification helped strengthen Pro Mujer Mexico’s commitment to its mission by embedding the CPPs into the culture of the institution. As a result of certification, Pro Mujer Mexico employees at all levels were trained on the CPPs and how to put them into practice. With these new skills, staff report having more clarity about their roles and greater ability to serve clients. Additionally, Pro Mujer Mexico staff considers the CPPs when designing new products or policies, ensuring that client protections are built in from the start.

The Client PerspectivePro Mujer Mexico clients are reaping the benefits of Smart Certification as well, noting especially the privacy, transparency and respect with which services are delivered.

Maria de Lourdes Cantero Ortiz, the owner of an auto parts business, put it this way: “[Pro Mujer Mexico] is a transparent institution. It is a truthful institution. I think privacy is the most important thing the company can offer.”

Felicitas Carbajal Sanchéz, a blanket vendor, agrees that transparency about policies that were formalized through Smart Certification differentiates Pro Mujer Mexico. “When I was invited to join Pro Mujer Mexico, they explained the whole situation to us about the loan, the interest rate and everything. Everything was quite clear. I’ve never had a single question.”

“Certification has meant the strengthening and formalization of our client protection processes.”

JOSÉ OSINAGA TORRES, SMART CERTIFICATION MANAGER, PRO MUJER MEXICO

THE SMART CAMPAIGN4

clients, congratulated Pro Mujer Mexico on its certification and other Mexican financial institutions have responded in admiration. Mexico City Regional Manager Magdalena Montaño also noted that Smart Certification is “a comfort” to Pro Mujer Mexico donors and investors because it affirms that the institution is a good investment. It has also attracted the attention of new funding sources like Deutsche Bank, Lockfund and Triple Jump.




“We are giving clients the opportunities to grow as people,” said Smart Certification Manager José Osinaga Torres, and clients agree. “Pro Mujer Mexico teaches us how to be more productive with our money,” Laura Liliana Ortiz Brizuela, owner of a textiles company said. “They explain to us how much interest we have to pay and they tell us how we can reduce that interest rate. Any questions we might have, we can call them on the phone and they provide answers.”

“Certification reflects what we are doing,” Rodolfo Medrano, Pro Mujer Mexico General Director said. “Our transparent client service approach improved. So, I think we are on this route of continuous improvement and certification has been useful to us.”

The Stakeholder PerspectiveBecause of Smart Certification, Pro Mujer Mexico is more visible both domestically and on the international front. CONDUSEF, the government agency overseeing the treatment of financial

“Pro Mujer Mexico teaches us how to be more productive with our money. They explain to us how much interest we have to pay and they tell us how we can reduce that interest rate. Any questions we might have, we can call them on the phone and they provide answers.”

LAURA LILIANA ORTIZ BRIZUELA, OWNER OF A TEXTILES COMPANY



Grooming Centre (Nigeria)

Smart Certification helped translate Grooming Centre Nigeria’s vision into practice through an introspective process and rededication to upholding clients’ rights.



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Smart Certification challenged Grooming Centre to fundamentally rethink its definition of client protection and reconsider how its policies and operations affected clients. The exercise produced a realization that there was much to be gained from client centric services and products and more to improve to achieve certification.

Some of the benefits Grooming Centre experienced as a result of Smart Certification include:

•Staff development. Grooming Centre overhauled its staff training materials to incorporate the tenets of client protection. This initiative also helped clarify management’s expectations about client treatment. As a result, on-boarding staff and field interactions have improved. Since certification, the team has recorded fewer complaints and an increase in positive feedback from clients.

•Clear and engaging client communications. Grooming Centre revamped its client-facing materials to be more customer-friendly as a result of Smart Certification. Disclosure agreements and loan application forms are now easier to understand. New communications materials, such as “Know Your Rights” posters displayed in all branches, now include infographics and pricing information more prominently.

About Grooming CentreGrooming People for Better Livelihood Centre, or “Grooming Centre,” was founded in 2006 in Lagos, Nigeria. At that time, financial services were essentially non-existent for economically active low-income people in many parts of the country. Today, the NGO has a network of 530 branches in 23 out of 36 states across Nigeria and serves more than 5.3 million clients.

Grooming Centre offers microloans, micro-savings products and other services that cater to its primarily female clientele. “The client is queen” is a common refrain at Grooming Centre — a nod to the value it places on its clients. That’s also where Smart Certification comes in: Grooming Centre’s mission is to empower the economically active poor by bringing a range of tailor-made microfinance services to their door step in accordance with global best practices. Smart Certification demonstrates Grooming Centre’s focus on clients and compliance with industry standards. The NGO received Smart Certification in 2016.

Benefits of CertificationGrooming Centre perceived Smart Certification as the natural next step in their quality improvement journey. Its strong leadership, dedication to client protection, ambitious expansion goals, and desire to serve as a model for the industry catalyzed the NGO toward certification.

“Grooming Centre has always been a client-focused organization. We did some very basic things from the beginning in terms of getting clients to know their rights. When the issue of certification came up, we decided try to see how far the things we already did would meet those standards and what could be improved.”

GODWIN NWABUNKA, CEO, GROOMING CENTRE

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•Improved customer service. As a result of Smart Certification, Grooming Centre established a toll-free hotline to receive client feedback. Grooming Centre staff, including its executives, make over 200 calls per week to proactively solicit client feedback. The callbacks have also closed the response time between when client complaints are lodged and when they are resolved to 24 hours.

•Responsible data management. Grooming Centre rolled out new client data storage and data sharing guidelines to achieve Smart Certification. The new privacy guidelines are more robust and clear. The IT department also implemented a software program that captures client complaints and feedback in real time. The institution also reduced the waiting period between application and loan disbursement from two weeks to one week. Client protection performance is now routinely discussed during weekly, monthly, and quarterly meetings.

The Client PerspectiveClients in Nigeria typically demonstrate limited awareness of why their personal data must be safeguarded and how it should be protected. As a testament to clients’ increasing awareness of their rights following Grooming Centre’s Smart Certification, one client who was photographed for Grooming Centre’s annual report asked to sign a form providing her consent. Grooming staff was pleased to see that a client had fully understood the idea of client data privacy and advocated to protect it.

“Smart Certification evaluates the way that you do business, the way you communicate with clients, the way the client sees you and the way clients appraise you,” Isaac Fadairo, Head of Management Information Systems, said. “It’s the modern way of getting feedback for what you do.”

Listening was mentioned as one of the most important things Grooming Centre has done to protect its clients since Smart Certification. The customer care department overseeing the 24-hour toll-free hotline dedicates much of its time to listening.

“It’s very important to us because we actually use it to measure the depth of our services,” Maureen Abumere, Deputy Head of Training, Research, Documentation and Customer Care, said about the hotline. “It’s not all about the loan. We try to follow-up on the individual to find out how much we have been able to impact their lives. Feedback from clients during these calls has been a mix of appreciation, testimonies, constructive criticism, questions about products, or interest in getting to know their provider by talking to them one-on-one.”

Aishat Arunei, a caterer and interior decorator, has been a client of Grooming Centre for two years. When she first started her business, Aishat borrowed equipment to make her food. Now she owns her own. Aishat used to participate in an informal group savings scheme wherein she was denied her share when it was her turn to receive money from the group. Being involved with a certified institution that meets stringent customer care principles has given her

“Once we engaged in the certification process, our conception of client protection broadened to include the client knowing what we are offering and the conditions. We initially thought it should be self-evident. Ultimately, it became clear that we needed to explain the total package and the total obligations that come with the package.”

NOEL IHEBUZOR, GOVERNING COUNCIL MEMBER, GROOMING CENTRE

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Certification has also allowed the institution to stand out among its competitors and earn the respect of its clients. “The client knows what she’s getting,” Noel Ihebuzor, Governing Council Member, said. “The process of delivery respects the client. The product is client-friendly, you don’t over-indebt the client, the process of engagement is not hostile. The client knows that what you see is what you get.”




confidence in financial transactions and enabled her to expand her entrepreneurial endeavors beyond the food industry.

Romoke Onaopemipo, a clothing designer and tailor, used credit from Grooming Centre to acquire sewing machines to grow her business. With encouragement from her credit officer, Romoke became more involved in the loan process, learning to check her account book to ensure that her payments were being recorded accurately. The transparency practices Romoke experienced were formalized through Smart Certification.

The Stakeholder PerspectiveSince becoming certified, Grooming Centre has experienced a boost to its international reputation and commendation from investors.

As one of two certified institutions in Nigeria, Grooming Centre has leveraged its position as a model for the sector to mentor nascent microfinance institutions via trainings on implementing basic client protections and running a sustainable operation.



“Smart Certification has really helped to balance the relationship between the institution and the customer. Now the customer understands that they have responsibilities as a client, and the institution knows about their responsibilities to the client.”

MAUREEN ABUMERE, DEPUTY HEAD OF TRAINING, RESEARCH, DOCUMENTATION, AND CUSTOMER CARE

The Smart Campaign works globally to create anenvironment in which financial services are delivered safely and responsibly to low-income clients. As the world’s first financial consumer protection standard, the Campaign maintains a rigorous certificationprogram, elevates the client voice, and convenespartners to effect change at the national level. Over 100 financial institutions, collectively serving more than 42 million people, have been certified foradhering to the Campaign’s consumer protection standards.

www.smartcampaign.org@SmartCampaign_

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