FULL TITLE:
Transparency in Interest Rate Pricing and Other Efforts Toward Consumer Protection
ROOM: Aberdare Hall
Translated session: English & French
PANEL:
Chair: Mr. Chuck Waterfield, President & CEO, MFTransparency, USA
Panelist: Ms. Robin Ratcliffe, Director, The Smart Campaign, Center for Financial Inclusion, ACCION
International, USA
Panelist: Mr. Fabian Kasi, CEO, FINCA Uganda Ltd, Uganda
Panelist: Billha Maina, Financial Sector Deepening Kenya, Kenya
All product and company names mentioned herein are for identification and educational purposes only and are the property of, and may be trademarks of, their respective owners.
This journal creates part of essential business articles that appear in the wall street journal. This
article, ‘How to Shop for a Bank’, outlines various business strategies that enhances business
trading. Additionally, the article provides basic procedures that a bank can undertake to ensure
decisive guidance when making shopping decisions. Clients are also involved in this kind of
business and therefore, they must evaluate viability of all respective banks before trading with
them or before going for shopping.
- See more at: http://www.customwritingservice.org/blog/how-to-shop-for-a-bank/
Prime Performance 2010 Bank and Credit Union Satisfaction SurveyJim S Miller
The results from this survey of over 6,000 U.S. bank and credit union customers are clear; customer satisfaction is highest at credit unions and small banks. The report issued today analyzes results for credit unions, small banks, large banks and mega banks, including Chase, Bank of America and Wells Fargo.
All product and company names mentioned herein are for identification and educational purposes only and are the property of, and may be trademarks of, their respective owners.
This journal creates part of essential business articles that appear in the wall street journal. This
article, ‘How to Shop for a Bank’, outlines various business strategies that enhances business
trading. Additionally, the article provides basic procedures that a bank can undertake to ensure
decisive guidance when making shopping decisions. Clients are also involved in this kind of
business and therefore, they must evaluate viability of all respective banks before trading with
them or before going for shopping.
- See more at: http://www.customwritingservice.org/blog/how-to-shop-for-a-bank/
Prime Performance 2010 Bank and Credit Union Satisfaction SurveyJim S Miller
The results from this survey of over 6,000 U.S. bank and credit union customers are clear; customer satisfaction is highest at credit unions and small banks. The report issued today analyzes results for credit unions, small banks, large banks and mega banks, including Chase, Bank of America and Wells Fargo.
Causes of Non-Performing Loan: A Study on State Owned Commercial Bank of Bang...Dhaka university
Research Objectives and Possible Research Questions, Classified Loan, Theories: Ethical theory, Moral Hazard, Political Power, Transaction Cost, Stakeholder, Conceptual framework, Research Position, References and Reviewed Literature
The study examined the determinant of mobile banking adoption among bank customers in Ghana,
with specific emphasis on Access Bank. In line with literature, the study applies theoretical frameworks
which have been developed from existing literatures on innovation and adoption to collect
responses from one hundred and fifty (150) sampled customers of Access Bank in order to investigate
the determinants of mobile banking adoption in the Ghanaian banking industry. The results
from the study revealed that, each factor measured had some level of significant effect on consumer
intention to adopt and use mobile banking services provided by Access Bank. Additionally,
the study unveiled that, perceived credibility and perceived financial cost were the major setback
with regards to customers adoption of mobile banking services provided by Access Bank, and as a
result of this, Ghanaians have formed a negative behavioural pattern towards mobile banking. In
addition, the findings showed that, perceived credibility and perceived financial cost have a
stronger effect on consumer intention to adopt and use mobile banking service than perceived usefulness
and perceived ease of use. It was, therefore, recommended that banks in Ghana should
create more awareness through personal interaction with customers, develop quality initiatives in
order to build customer’s confidence. Equally, banks should also review the cost of their mobile
banking service.
The Journey to Customer Centricity in Financial InclusionCGAP
Most microfinance institutions provide a narrowly focused product range, usually only microcredit. Until recently, this was the major focus of Janalakshmi
Financial Services, a microfinance institution in India serving over 2 million customers in urban areas. Janalakshmi built its portfolio around a Grameenstyle group loan product. In 2011, Janalakshmi took the first steps toward customer-centricity, segmenting its customer base and designing the “Jana-One” delivery channel to offer a full range of financial services to the owners of high-growth potential microenterprises, a segment they called “accelerators.” While this move was an innovation for Janalakshmi’s business model, the institutional mechanisms were still set up to deliver credit. Recognizing this tension between the vision and execution, Janalakshmi partnered with CGAP to explore new approaches in understanding its customers and to implement the principles of customer-centricity throughout the operational
structures of the organization. The Janalakshmi journey toward embedded and internalized customer-centricity will span three broad phases (Understanding Customers, Designing Effective Organizational Delivery, and Making the Business Case Work). This brochure shares the learnings from the first phase of work to understand customers. Janalakshmi, CGAP, and Innovation Labs (a Bangalore-based design-innovation consultancy) worked together over six months on this project.
Consumers Buying Behaviors’ Loans and Credits: A SituationerIJAEMSJORNAL
This study aimed to describe the situation of the consumers buying behaviors loans’ and credits with the use of descriptive research design. The researchers found out that micro–financing business or lending institutions and private individuals are credit service providers of the respondents. The types of loan and credit they avail are investment loan or business loan which is worth more than Php 100,000 and consumer credit amounting to less than Php 20,000. Loans can provide their needs, they do not have stable source of income, their salary are not enough, they want to buy gadgets, apparels and vehicles are the main reasons why the respondents avail loans and credits. On the other hand, long process of approval, time to repayment of maturity date and high interest rate are problems encountered by the respondents in availing credit services. Complex–buying and habitual–buying are the consumer behaviors manifested by the respondents.
Causes of Non-Performing Loan: A Study on State Owned Commercial Bank of Bang...Dhaka university
Research Objectives and Possible Research Questions, Classified Loan, Theories: Ethical theory, Moral Hazard, Political Power, Transaction Cost, Stakeholder, Conceptual framework, Research Position, References and Reviewed Literature
The study examined the determinant of mobile banking adoption among bank customers in Ghana,
with specific emphasis on Access Bank. In line with literature, the study applies theoretical frameworks
which have been developed from existing literatures on innovation and adoption to collect
responses from one hundred and fifty (150) sampled customers of Access Bank in order to investigate
the determinants of mobile banking adoption in the Ghanaian banking industry. The results
from the study revealed that, each factor measured had some level of significant effect on consumer
intention to adopt and use mobile banking services provided by Access Bank. Additionally,
the study unveiled that, perceived credibility and perceived financial cost were the major setback
with regards to customers adoption of mobile banking services provided by Access Bank, and as a
result of this, Ghanaians have formed a negative behavioural pattern towards mobile banking. In
addition, the findings showed that, perceived credibility and perceived financial cost have a
stronger effect on consumer intention to adopt and use mobile banking service than perceived usefulness
and perceived ease of use. It was, therefore, recommended that banks in Ghana should
create more awareness through personal interaction with customers, develop quality initiatives in
order to build customer’s confidence. Equally, banks should also review the cost of their mobile
banking service.
The Journey to Customer Centricity in Financial InclusionCGAP
Most microfinance institutions provide a narrowly focused product range, usually only microcredit. Until recently, this was the major focus of Janalakshmi
Financial Services, a microfinance institution in India serving over 2 million customers in urban areas. Janalakshmi built its portfolio around a Grameenstyle group loan product. In 2011, Janalakshmi took the first steps toward customer-centricity, segmenting its customer base and designing the “Jana-One” delivery channel to offer a full range of financial services to the owners of high-growth potential microenterprises, a segment they called “accelerators.” While this move was an innovation for Janalakshmi’s business model, the institutional mechanisms were still set up to deliver credit. Recognizing this tension between the vision and execution, Janalakshmi partnered with CGAP to explore new approaches in understanding its customers and to implement the principles of customer-centricity throughout the operational
structures of the organization. The Janalakshmi journey toward embedded and internalized customer-centricity will span three broad phases (Understanding Customers, Designing Effective Organizational Delivery, and Making the Business Case Work). This brochure shares the learnings from the first phase of work to understand customers. Janalakshmi, CGAP, and Innovation Labs (a Bangalore-based design-innovation consultancy) worked together over six months on this project.
Consumers Buying Behaviors’ Loans and Credits: A SituationerIJAEMSJORNAL
This study aimed to describe the situation of the consumers buying behaviors loans’ and credits with the use of descriptive research design. The researchers found out that micro–financing business or lending institutions and private individuals are credit service providers of the respondents. The types of loan and credit they avail are investment loan or business loan which is worth more than Php 100,000 and consumer credit amounting to less than Php 20,000. Loans can provide their needs, they do not have stable source of income, their salary are not enough, they want to buy gadgets, apparels and vehicles are the main reasons why the respondents avail loans and credits. On the other hand, long process of approval, time to repayment of maturity date and high interest rate are problems encountered by the respondents in availing credit services. Complex–buying and habitual–buying are the consumer behaviors manifested by the respondents.
This presentation on the G20/OECD High-Level principles on Financial Consumer Protection and sectoral guarantee arrangements by Sebastian Schich addresses the role of guarantee arrangements to protect consumer assets in the financial service sector, such as pension and insurance claims and bank deposits.
More information is available on the OECD website at http://www.oecd.org/finance/financialsectorguarantees.htm
http://www.oecd.org/finance/financialconsumerprotection.htm
Patient Rights, Patients Bill, ConSumer Protection Act, Nurse and Patient Bill of Rights,
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this slid is regarding Indian consumer protection of 1986. it will be useful for students who are doing MBA PGDM and graduation in commerce and management
In this presentation MFTransparency CEO & President Chuck Waterfield explores ways that the industry can begin to self-regulate to promote transparent pricing. This presentation uses many approaches to inspire the microfinance industry to action, even invoking Gandhi’s Seven Deadly Social Sins. A fresh view of this topic, for those already familiar with it
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In recent years FinTech, has grown tremendously and is making its presence felt across the globe. The Singapore FinTech Consortium presents our slide deck: Introduction to Financial Inclusion in Southeast Asia to give you a preview of our research in the Southeast Asian landscape.
If you are keen to learn about P2P Lending, please view our slide deck at:
http://www.slideshare.net/SGFinTech/singapore-fin-tech-consortium-intro-to-p2p-lending
If you would like to receive a pdf copy of any of our slide decks, please drop us an email at info@singaporefintech.com and we'll be happy to oblige. For more information about us and our service offerings, please visit our company website at www.singaporefintech.com.
This presentation explores the issue of pricing transparency in microfinance from many perspectives, including history, the media, microfinance institutions and clients. It illustrates why pricing in microfinance has come to be so confusing, how industry stakeholders would benefit from transparent pricing and what can be done to implement transparent pricing practices.
Explore the evolving trends in banking. Consumers’ values and expectations of their bank are evolving, stemming from a new generation of buyers and the rise of disruptive fintechs helping people to reimagine how banking could - and should - be.
A Study on Consumer Preference towards Four Wheeler Loans with Reference to C...ijtsrd
Consumer preferences are defined as the subjective individual tastes, as measured by utility, of various bundles of goods. They permit the consumer to rank levels of utility they give to the consumer. The study is to assess customer preference towards selected loan for their four wheelers and to know about the attitude of customer while preferring loans on their vehicle and to analyze the customer's attitude towards the loan availing activity. For this purpose primary data is been collected from 250 customers who prevail loan for their four wheeler with reference to Coimbatore district. The data will be analyzed based on the statistical tools such as Percentage analysis, Chi square test, Descriptive statistics, Anova, Rank analysis, One sample run test. The study will be concluded based on the result arrived from statistical analysis based on the primary data. Dr. R. Maheswari | T. Ramesh Kumar | M. Jency Abisha "A Study on Consumer Preference towards Four Wheeler Loans with Reference to Coimbatore District" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-6 , October 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29210.pdf Paper URL: https://www.ijtsrd.com/management/consumer-behaviour/29210/a-study-on-consumer-preference-towards-four-wheeler-loans-with-reference-to-coimbatore-district/dr-r-maheswari
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This PPT: how Equitas does integrated health and microfinance
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This PPT: action planning
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This PPT: client testimonies
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This PPT: Bandhan's market research
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This PPT: intro, objectives, and the agenda
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This PPT: intro to integrated health and microfinance
This course will inform, engage, and prepare participants who are considering the feasibility and benefits of adding health to microfinance. The training will provide experience-based examples, lessons learned, cost information, and discussion about addressing the link between poverty and ill health without taking MFIs off-track or incurring undue expenses.
This PPT: how and why to do market research
This one-day workshop will introduce the pathway that financial service providers can take to enhance their social performance management (SPM) practices, using the Universal Standards for Social Performance Management (“Universal Standards”) as a framework for improving practice. Case studies and activities will make the day as interactive as possible. The target audience for this workshop is associations and direct service providers.
The day will start by quickly defining SPM and exploring its importance to an institution’s clients and business. Participants will take a deeper look at the Universal Standards and learn how to use the SPI4 Audit Tool to assess their current level of implementation of the Universal Standards. We will also discuss key resources available to help financial service providers institute changes after they assess themselves.
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You have helped your clients see themselves and their families in a new light as economic actors. You can do the same for their lives as civic actors. The nations of the world have agreed to the Sustainable Development Goals, goals such as eradicating extreme poverty, eliminating preventable child deaths, and ensuring all children complete secondary school all by 2030. In this training you will learn how to empower your clients to use their voices as citizens on issues that matter in their lives, the lives of community members, and across their nation. By helping clients influence village leaders and members of Parliament through advocacy, we will make the SDGs real.
G.R. Chintala, NABARD, Bangladesh, Partnerships that Build Bridges to New Fro...
AMERMS Workshop 4: Transparency in Interest Rate Pricing (PPT by Billha Maina)
1. Transparency in Interest Rate Pricing and Other Efforts toward Consumer Protection Microcredit Summit 7th April 2010 Bilha Maina, Project Manager Financial Education & Consumer Protection
2. About FSD Kenya Financial Sector deepening works to support the development of inclusive financial markets in Kenya by improving competition and consumer choices support has been given to the Central Bank of Kenya to educate the public on the market bank charges and lending rates Investigated the different lending rate disclosure regimes with an aim to introduce standard measurement methods Consumer protection diagnostic study is underway and regular consultations with stakeholders are being undertaken
3. Survey on Bank Charges Cost comparisons for current accounts
4. What consumers say about Bank Accounts “The banks are doing very little to inform the public about the charges. They only talk about the advantages…Just like Bata would tell me a certain shoe is Ksh. 399, I would prefer if it was Ksh. 600 with all the charged involved in that.” “There are times you might check your balance only to realize that they have made some deductions. When you inquire about it, they tell you to come back the following week. They might return the money and sometimes they might say they have no idea what happened to the missing money.”
5. “I was not told this is a flat rate I was just told you will be paying the loan at 15% interest rate. I think banks take advantage of first timers” (Male, Older Loan, MFI & Bank, Nairobi Urban) “I took a loan in March in one of the banks around I was surprised to find that I was taking Ksh.50000 and they deducted Ksh.10000 I asked them why they were taking this and they told me it was for insurance and what have you and they did not explain that to me in the first place. I tend to think that SACCOs do not have any hidden charges”. (Males, Younger, Savings, MFI & SACCO, Eldoret Rural) “Therefore, when you realize or when you have a problem that is when they show you those terms and conditions. Sometimes you do not understand as they are normally written in very small letters. And sometimes they use the banking language that jargon and sometimes you do not understand.” (Female, Older, MFI & Banks, Nairobi Urban) Consumers are confused..
6. Room for improvement Current Ideal Hidden costs, unclear terminology Greater transparency Cannot be compared across loans Allow for informed ‘shopping around’ Standard Interest Rate Cannot be compared across institutions Encourage competitive rates Encourage honest competition A standard interest rate measure can level the playing field through transparency, consumer awareness and honest competition within the financial industry
7. The case for regulation Absence of an effective and appropriate regulatory credit environment Current Reality Financial Institutions Consumer Low consumer bargaining power High interest rates Hidden costs Over indebtedness Negative perceptions “Distress” Default In the absence of an appropriate regulatory framework there is an increased likelihood of exploitation, especially in the case of low-income, and vulnerable consumers.
8. Distressed consumers & providers “There was a person here in Nyamathi who was unable to pay for the loan so (the MFI) went to their place to get his things so they could auction them. On hearing that since the person also owed (another MFI) some money they also decided to go to the home. So both groups met and took everything.” Another... “She was buried on Wednesday…she died saying that you should not do like me.”
9. The case for regulation Absence of an effective and appropriate regulatory credit environment Current Reality Financial Institutions Consumer Low consumer bargaining power High interest rates Hidden costs Effective and appropriate regulatory credit environment Best case scenario Financial Institutions Consumer Transparent process Can transparency improve the perceptions of the industry and improve consumer welfare? “Truth in lending”
10. APR Regulatory Framework Legislated Disclosure Consumer Protection Include MFI/NBFIs USA Canada UK European Union Ghana Peru Malaysia South Africa Kenya Overview of disclosure regimes
25. Annual Percentage rate The APR formula is a representation of these inputs and calculates an ‘effective’ interest for credit. However, this measure is comparable only across similar sized loans and loan terms. Interest methodology APR Formula Specified fees and charges Loan term The actuarial method is deemed the most accurate and is widely used. The N ratio measure can be calculated easily on a calculator. Actuarial method APR Equation and Calculation Direct ratio Constant ratio N ratio The APR calculation can be standardised and simplified, however the main challenge is for consumers to understand it and use it effectively in comparing loans across institutions.
26.
27. APR also felt to be useful, but complex and difficult to understand
34. More comfortable with TCC and RS, but feel it is most useful to provide all three measuresInternational research shows that consumers tend to get confused and overwhelmed and that it is important to run financial education programs and to keep the message simple.
35. Access to Finance Only 22.6% of the population(3.2 million people) are formally banked, 3.4% of the population are MFI’s clients (doubled) “The problem is most of us are very poor in maths ….they give you figures, figures, figures. I would prefer to be given the final figure for the whole year.” 38% of the population currently has, or ever had a credit product-service-facility “I was not told this is a flat rate I was just told you will be paying the loan at 15% interest rate. I think banks take advantage of first timers.” “…they show you those terms and conditions……normally written in very small letters…..they use the banking language that jargon and sometimes you do not understand.” 52% of the population has or ever had a savings product-service or facility Source: FinAccess2009 Source: Focus Groups 2008 & 2010 Low-income consumers in Kenya have low levels of financial usage and are suspicious of credit providers. This can be mitigated by a transparent disclosure regime that consumers understand and have confidence in.
36. Consumer protection diagnostic Activities Review of relevant laws and regulations, industry codes and standards Qualitative and quantitative data gathering Key stakeholders interviews regulatory agencies, service providers, industry associations, consumer representatives, others
37. Conceptual Framework Consumers receive quality services that are characterized by transparency, fair treatment and effective recourse mechanism. Pillars Regulation and supervision Industry standards and codes of conduct Consumer awareness
39. Envisaged Quick Win 1. Embed CP in various sector acts 2. Transparency and disclosure Mandatory disclosure of total cost of credit Repayment schedule for loan customers Plain language agreements (explained to customers) 3. Recourse Mechanism Information of consumers on recourse channels in all agreements & service points Telephone, email, SMS contacts for complaints Log of complaints, reviewed by regulator
FSD has supported the publication of a simplified and more transparent survey on bank charges and lending rates aimed at enhancing competition within the banking sector through provision of information to consumers. The Central Bank of Kenya is now championing this initiative and will continue the quarterly publishing of these rates on their website.
It is not just about bank charges. In realization of the challenges that consumers face in understanding how interest rates are calculated and how to compare multiple product offerings based on cost comparisons, FSD Kenya supported the Central Bank of Kenya and the Kenya Bankers Association to undertake a study on the standard measure for consumer interest rates comparing different approaches used to calculate rates in many other countries. The study established that the best methods for calculating interest rates so that they are easily understood by consumers are the Total cost of credit and the Repayment Schedule. APR was seen as more difficult for consumers to grasp. The study found that consumers are confused…. The findings were presented to stakeholders and there was a general acceptance of the idea of introducing a standard disclosure regime. An agreement was reached that the banking industry should self regulate and within two years adopt the TCC and RS disclosure regimes followed by the more complex APR.
Practices around the world showed that countries that had adopted interest rates disclosure regimes has succeeded in reducing the interest rates suffered by consumers. In Peru, there was a report 15% fall in interest rates. This encourages increased use of credit facilities enabling the sector to grow.
Consumers in the focus group discussions for the CP survey indicated that consumers are borrowing from multiple providers, who clearly are not able to effectively undertake due diligence/KYC and this results in distress for both the financial service providers and for consumers....