The Smart Campaign and WSBI members consumer protection initiatives

Transcription

1 The Smart Campaign and WSBI members consumer protection initiatives Workshop Challenges of client protection, awareness and education Anne-Françoise Lefèvre European Microfinance Network Conference 24 June 2010

2 About WSBI International retail banking association 109 members in 90 countries Sister organisation: European Savings Banks Group (ESBG) «The global voice of savings and retail banking» Member banks 3 Rs compliant: Retail, Regional, Responsible

3 WSBI members and microfinance Support to the socially vulnerable people and microentrepreneurs through ad hoc microfinance vehicles or programmes (eg. Parcours Confiance/BPCE, Die Zweite Sparkasse/Erste Bank) Ability to accommodate the needs of small scale savers, giving access to small credits, transferring small amounts etc as part of the regular banking offer (eg. 75% of accounts at Postbank Tanzania are below 15 USD, average credit at FECPMAC Peru is USD)

4 What is The Smart Campaign? Global, industry-wide effort to enhance microfinance client protection: Put the interests of clients first Provide transparent, respectful services Distinguish industry as finance leader Collaboration of microfinance stakeholders (MFIs, investors, donors, networks and associations) : plus endorsers Housed in Center for financial inclusion at Accion International

5 What are the client protection principles? 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

6 Why is client protection good for business? Creates client loyalty Increases client retention Strengthens reputation Builds solid portfolio Why is the Campaign important? Demands for accountability & transparency Microfinance crises in several countries Public & political concern over high interest rates Rising competition & consumer lending

7 What does the Campaign bring? Provision of resources and tools to incorporate Smart Microfinance principles into all aspects of MFIs operations Self assessment Investor toolkit Smart Notes Platform for exchange of experiences and best practices

8 Steps for microfinance institutions 1. Endorse at 2. Encourage CEO & Board to adopt principles 3. Complete institutional assessment 4. Maintain ongoing implementation

9 WSBI members and client protection As banks, WSBI members have to comply with high standards of client protection, especially in Europe: Pre-contractual information: fair, clear, comprehensible, timely Standardised information for consumer credit (200/ EUR) Bank fee/calculation of the price: clear, intelligible, unambiguous, timely Detailed provisions for transparent information on conditions, information requirements and costs of payment services

10 WSBI members client protection good practices ESBG Guidance on Fair and Clear Relations with Customers Clear and honest information on products and services and other terms and conditions Responsible advertisement and visibility of information on products and services, both in branches and on Internet sites Advice that meets the needs of customers and promotion of products and services appropriate to personal circumstances and risk profile Cases of financial difficulty considered sympathetically Information and communication with clients, and dealing with customer complaints quickly and efficiently

11 WSBI members client protection good practices Individualised support programmes for microcredit clients: financial coaching and money management education Help to the decision-making process Brief, plain language summary of main terms of contracts, with concrete examples Decision-trees in contract documents Preventive measures, eg. SMS messaging when situation gets difficult, «Credit Clinics»

12 For more information: Anne-Francoise Lefèvre World Savings Banks Institute