As the Smart Campaign continues to raise awareness and reaches 1,000 endorsers, its organizers are hoping to turn awareness into action with the new www.SmartCampaign.org. The new website provides an avenue to explore the different ways in which we can all help integrate the Client Protection Principles into the daily operations of the microfinance industry.
Like the Smart Campaign, the new website strives to be actionable, practical, collaborative, and global.
Actionable: The new website provides tools and resources on how to implement the Client Protection Principles. These instruments include assessment guides, toolkits, and Smart Notes exploring client protection best practices.
Practical: The resources on the website are organized by stakeholder so that upon clicking “Take Action” endorsers immediately find the information most relevant for their own role in the microfinance industry. The website’s tools and resources library can also be sorted by principle, so that one can find all related tools in just one click.
Collaborative: The Campaign is a collaborative effort, and the website incorporates this characteristic as tools and resources are posted from all corners of the world. The site is interactive, too. Users can rate each of the tools on its effectiveness, and visitors can submit their own tools for implementing the Client Protection Principles. Endorsers are encouraged to offer feedback and critique the tools.
Global:The Smart Campaign aims to be global and to that end, www.SmartCampaign.org will be translated into four additional languages in the coming months: Spanish, French, Russian, and Arabic. In the meantime readers can find tools in various languages, including the Self Assessment Guide for Microfinance Institutions, now available in all five languages. www.SmartCampaign.org will help bring the Client Protection Principles to life in microfinance institutions around the world. Join this effort by endorsing the campaign, visiting the new website, and providing your own ideas and feedback.
Microfinance industry representatives, who attended a consultative dialogue on transparent pricing on March 17, 2010 at the Diamond Hotel in Manila, agreed that pricing transparency would be beneficial for microfinance clients and the industry as well.
The dialogue was called for by the Bangko Sentral ng Pilipinas (BSP) and the Microfinance Council of the Philippines, Inc. (MCPI) to raise the level of awareness and understanding of MCPI members on issues related to pricing transparency, solicit MFI views and perspectives and identify succeeding steps towards achieving a consensus on the network's position on these issues.
A number of MFIs have good practices as far as transparency is concerned, including the provision of a disclosure statement translated to the vernacular, orientation on product pricing as part of the requirement for availing a loan, dissemination of information, education and communication materials, and following the Truth in Lending Act.
What remains wanting is agreeing on a standard format for computing and reporting interest rates, a time table and a road map to come up with an industry accepted methodology. BSP wants to issue a regulation that is consistent with industry standards, but if the microfinance community collectively adopts a common practice, a regulation need not be issued.
While the microfinance sector is supportive of initiatives to establish a credit bureau, it is equally concerned about the implications of the recently passed Credit Information System Act (CISA) on their operations. Sector representatives expressed this during a forum organized by the Microfinance Council of the Philippines, Inc. (MCPI) on March 17, 2010 at the Diamond Hotel in Manila. Passed on October 21, 2009, the law calls for the establishment of a central repository of credit data about borrowers. The forum served as an opportunity for participants to raise questions and/or issues on the CISA and its implementing rules and regulations. Securities and Exchange Commission Chair Fe Barin served as resource speaker. She provided a background and timeline on the status of implementation of the CISA.
The CISA will require lenders to submit information on their potential clients. Particularly for the larger MFIs, there is a substantial amount of work that needs to be done to allow MFIs to comply with the reporting requirements. Microfinance players request for guidelines on the stages of implementation of the law so they could make operational adjustments accordingly.
The law also calls for the establishment of a central Credit Information Corporation (CIC). The CIC shall be considered a public corporation with 60% of shares owned by the government and 40% shares owned by the private sector. In five (5) years, the government must begin to divest itself from the corporation until it only holds minority shares.
The law named the SEC Chair as the ex-officio Chair of the CIC so SEC is taking lead in ensuring that the CISA is going to be implemented and the CIC organized.
Since the law has been enacted, the next crucial steps will be the appointment of the members of the CIC board and the approval of government appropriation to fund the needed resources for implementation. Stakeholders are being engaged on the development of a code of ethics for the CIC and private investors to the corporation will have to be identified although some sectors have already signified their intention to invest into the CIC.
