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Principle #5 mechanisms for redress of grievances to post

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  • Principle #5- Mechanism for Redress of Grievances
    [Introductions of facilitator(s) and participants]
    <number>
  • This is the agenda for today’s discussion. We will begin by reviewing the Six Principles of Client Protection.
  • [Each principle is listed, along with how the Smart Campaign defines the principle].
    These are the Six Principles of Client Protection
    1.Avoidance of Over-Indebtedness. Providers will take reasonable steps to ensure that credit will be extended only if borrowers have demonstrated an adequate ability to repay and loans will not put the borrowers at significant risk of over-indebtedness. Similarly, providers will take adequate care that only appropriate non-credit financial products (such as insurance) are extended to clients.
    2.Transparent and Responsible Pricing. The pricing, terms and conditions of financial products (including interest charges, insurance premiums, all fees, etc.) will be transparent and will be adequately disclosed in a form understandable to clients. Responsible pricing means that pricing, terms, and conditions are set in a way that is both affordable to clients and sustainable for financial institutions.
    3. Appropriate Collections Practices. Debt collection practices of providers will be neither abusive nor coercive.
    4. Ethical Staff Behavior. Staff of financial service providers will comply with high ethical standards in their interactions with microfinance clients, and such providers will ensure that adequate safeguards are in place to detect and correct corruption or mistreatment of clients.
    5. Mechanisms for Redress of Grievances. Providers will have in place timely and responsive mechanisms for complaints and problem resolution for their clients.
    6. Privacy of Client Data. The privacy of individual client data will be respected in accordance with the laws and regulations of individual jurisdictions, and such data cannot be used for other purposes without the express permission of the client (while recognizing that providers of financial services can play an important role in helping clients achieve the benefits of establishing credit histories).
  • Now, let’s discuss how institutions put Principle #5 into practice.
  • <number>
    This is the Campaign’s definition of the principle “Mechanism for Redress of Client Grievances.” An institution puts the principle into practice by having a mechanism for collecting, responding in a timely manner, and resolving problems for customers.
  • A good mechanism for the redress of client grievances will include the elements listed here. Experiences shows that installing a suggestion box for client comments is not an adequate substitute for proper handling of concerns and complaints.
    <number>
  • Now, let’s discuss how dissatisfied clients affect the institution
  • Institutions have an interest in knowing when clients have questions and complaints, so that they can resolve the problem. If complaints are not resolved, clients are dissatisfied. Dissatisfied clients can damage the institution. [Review the content on the slide].
    (These statistics come from a presentation by Rolando Virreira Centellas: “Educación Financiera y Defensa del Consumidor”)
    <number>
  • Institutions that argue “our clients don’t complain, so we do not have any dissatisfied clients!” may be wrong. If your institution does not receive complaints, customers may be completely satisfied OR:
    Clients might not feel empowered to share their concerns and complaints, or
    They might not know how to do so, or
    Clients might not feel like they can complain without this affecting their business relationship with the institution.
    <number>
  • Now, we would like to hear from YOU.
  • [At this point in the presentation, asks participants for their feedback on the information presented so far. Use these questions (or others that have come up during the presentation) to stimulate discussion.]
    <number>
  • Now, we will discuss our own experiences, as well as good practice examples from around the world.
  • Two microfinance practitioners will discuss their experiences confronting client over-indebtedness.
    Suggested Format:
    1. One presenter discusses prevention of client over-indebtedness (how to design and sell financial products that avoid over-indebting clients).
    2. The other presenter talks about mitigation (his or her experiences facing pre-existing over-indebtedness problems and finding solutions that benefit MFIs and clients).
    <number>
  • This slide and the next slide present 6 indicators of good practice for this principle.
    [Read through the list and ask participants to think about which of these indicators their institution they are fulfilling, and which they could improve].
  • (Continued from previous slide)
  • This is a good practice example from Banco Solidario (Ecuador).
    An institution can implement a single system for receiving and resolving client complaints, or an institution may chose to deal with client complaints through several systems, based on the severity, complexity, and/or urgency of the complaint, and who is involved in the resolution (credit staff, management, etc). This graphic depicts how Banco Solidario uses three channels for collecting client grievances, based on the urgency and complexity of the complaint. The ‘feedback mechanism’ referenced in the third stage can be a customer service hotline, an online communication system, or an automatic escalation from one of the other channels.
    (Note: Starting in 2008, the Center for Financial Inclusion carried out a fourteen month-long research project called Beyond Codes. In this project, fourteen MFIs piloted the implementation of pro-client policies and practices. Their experience revealed good practice examples of client protection. The good practice examples used in this presentation come from the Beyond Codes project.)
     
    <number>
  • These are three examples of good practices from MFIs around the world.
  • Now, let’s conclude with a summary of what we’ve discussed, and a call to action.
  • [Read the summary on this slide]
    [Use the Call to action questions, and any of the questions below, to stimulate discussion among participants].
     
    How could one or more of the “good practice” examples be implemented in your institution?
    What other solutions have you seen (or would like to see)?
    Have you seen a similar (or different) practice in your institutions or elsewhere?
    What are the costs of implementing robust mechanisms for redress of client grievances? What are the benefits?
    How do you think responding to and solving client complaints can both improve product and service delivery and increase client satisfaction?
  • <number>
    Thank you!
  • Transcript

    • 1. Principle #5 – Mechanisms for Redress of Grievances This presentation is made possible by the Smart Campaign www.smartcampaign.org
    • 2. 2 1. Client protection principles 2. Principle #5 in practice 3. How dissatisfied clients affect the institution 4. Participant feedback 5. Practitioner lessons and good practices 6. Conclusion and call to action Agenda
    • 3. 3 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 Client Protection Principles
    • 4. 4 1. Client protection principles 2. Principle #5 in practice 3. How dissatisfied clients affect the institution 4. Participant feedback 5. Practitioner lessons and good practices 6. Conclusion and call to action Agenda
    • 5. 5 Mechanism for Redress of Client Grievances A financial institution measures up to this principle by having a mechanism for collecting, responding in a timely manner, and resolving problems for customers.
    • 6. 6 A Mechanism for Redress of Grievances Includes:  Having a process for collecting and resolving concerns and complaints from clients.  Dedicating staff resources to the complaints system.  Responding quickly.  Internal audit or other monitoring systems check that complaints are resolved satisfactorily.  Incorporating client feedback into the improvement of products and services. A suggestion box is not a substitute for proper handling of concerns and complaints.
    • 7. 7 1. Client protection principles 2. Principle #5 in practice 3. How dissatisfied clients affect the institution 4. Participant feedback 5. Practitioner lessons and good practices 6. Conclusion and call to action Agenda
    • 8. 8 How Dissatisfied Clients Affect the Institution Findings from the Field: A very satisfied client will talk about his/her experiences with 3-4 people, but a dissatisfied client will tell 8-9 people. When a dissatisfied client’s complaints are received, answered, and solved, there is a 90% chance that s/he will return to the institution. 90% of dissatisfied clients whose problems are not resolved will never return to do business with the institution again.
    • 9. 9 No Complaints Completely Satisfied Customers If your institution does not receive concerns or complaints, be careful:
    • 10. 10 1. Client protection principles 2. Principle #5 in practice 3. How dissatisfied clients affect the institution 4. Participant feedback 5. Practitioner lessons and good practices 6. Conclusion and call to action Agenda
    • 11. 11 Feedback from Participants What channels does your institution use to receive, respond to, and resolve complaints? What complaints or suggestions have you received at your institution? How did your institution respond? Has the complaints management system evolved at your institution since you began working there? Do clients take the opportunity to give their feedback?
    • 12. 12 1. Client protection principles 2. Principle #5 in practice 3. How dissatisfied clients affect the institution 4. Participant feedback 5. Practitioner lessons and good practices 6. Conclusion and call to action Agenda
    • 13. 13 [Write your points for the presentation here:] • Points • Points • Points • Points Lessons from Practitioners
    • 14. 14 Indicators of Good Practice (1 of 2)
    • 15. 15 Indicators of Good Practice (2 of 2)
    • 16. 16 Good Practice: Using Multiple Complaints Channels At one institution, complaints are handled through several channels depending on the urgency and complexity of the complaint: Source: Adapted from Banco Solidario
    • 17. 17 Good Practices from Around the World One MFI includes the phone number for its call center on the first page of all its contracts. The same MFI also includes the phone number for the government agency responsible for client protection on the same page of the contract. One MFI requires its Internal Audit department to check a sample of dissatisfied clients to make sure they received quick responses and resolutions. If they didn’t, the department prompts more investigation.
    • 18. 18 1. Client protection principles 2. Principle #5 in practice 3. How dissatisfied clients affect the institution 4. Participant feedback 5. Practitioner lessons and good practices 6. Conclusion and call to action Agenda
    • 19. 19 Summary: • The Smart Campaign has developed six principles of client protection, one of which is mechanisms for redress of client grievances. • Financial institutions can adopt this principle by having a mechanism for collecting, responding to, and resolving problems for customers. • By adopting this principle, financial institutions can attract and retain clients and build a positive, trustworthy image. Conclusion Call to action • What “next steps” can your institution take to institutionalize and/or improve a mechanism for redress of client grievances?
    • 20. 20 Join the Campaign and Endorse the Principles of Client Protection Have questions? Want more information? Contact the Smart Campaign Email: info@smartcampaign.org Thank you!

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