Customer protection – Smart Campaign status

source : Smart Campaign

The Smart Campaign was launched in October 2009 under the aegis of the Accion microcredit network. It circulates to players in the microfinance sector seven principles intended to guarantee better protection to borrowers. Among those principles are interest rate transparency, prevention of over-indebtedness, and fair and respectful treatment of borrowers by employees.

Two years after its launch, the Smart Campaign people have just published their first mid-term report about the effective deployment of these principles. Based on 479 assessments made by third parties (specialist rating agencies and investment funds), the Smart Campaign managed to rate 300 MFIs from 1 to 5 on each of the principles. On this panel, 88% of MFIs scored over the average (set at 3.0), with an overall average of 3.8. This is an encouraging result, even though the sample represents “only” 40 million customers out of 205 million worldwide.

The next step is a generalised certification system in 2012, whose assessment should be entrusted to third parties such as rating agencies specializing in microfinance.

Download the report from this link

This article is part of the special report: