Tracking the Business Case of Consumer Protection

Consumer Protection Action Research

A consumer protection dialogue among MFIs and support organizations was organized by the Microfinance Council of the Philippines last March 13, 2009 in Pasig City. The initiative aimed to discuss consumer protection practices on the ground and to bring the participants up to date on the Beyond Codes Project, a global action research led by Accion International’s Center for Financial Inclusion with MCPI as its local partner.

Mr. Eduardo Jimenez of the Bangko Sentral ng Pilipinas (BSP) updated the participants on the progress of the BSP’s Inclusive Financial Advocacy Staff (IFAS) initiatives on consumer protection and financial literacy.

Ms. Heather Clark, Lead Consultant for the Beyond Codes Project, discussed with the participants the six (6) principles of consumer protection. They are: preventing client over-indebtedness; transparent (and fair) pricing; appropriate collection practices; ethical staff behavior; mechanism for complaints and redress and; privacy and security of client data. She underscored that ethical investment and pursuit of client welfare are complementary goals in microfinance. Among the six principles, the ensuing dialogue dwelled on the prevention of over-indebtedness, appropriate collection practices and varying application of fair pricing among MFIs.

Three (3) member-MFIs pledged to participate in the Beyond Codes, a project that seeks to track the business case of consumer protection practices for MFIs in Kenya, Mexico, Bosnia and the Philippines.