Frontier Social Investing Putting Impact First, 18th Microcredit Summit, Abu Dhabi UAE, March 14-17, 2016

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Impact Investors and Smart
Certification:
Working together to ensure
consumers are protected
Elisabeth Rhyne
Smart Campaign Steering Committee
Monday, March 14, 2016

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The Client Protection Principles
1. Appropriate Product Design and Delivery
2. Prevention of Over-indebtedness
3. Transparency
4. Responsible Pricing
5. Fair and Respectful Treatment
6. Privacy of Client Data
7. Mechanisms for Complaint
Resolution

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The Smart Campaign
The Smart Campaign is a global effort to embed a set of client protection
principles into the fabric of the microfinance and financial inclusion
sectors.
300+Training Events
and Assessments Since
the Campaign’s
Founding
23 million clients served by the 49 institutions Certified in
Client Protection
70+Tools and
Implementation
Guides available on the
Smart Campaign
website in many
languages
4,500 Endorsements of
the Smart Campaign
and Client Protection
Principles

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Consumer Protection Problems Cause Suffering
and Damage Trust in Lenders
Many clients
lack basic
information
About 30% of
clients could not
tell how much
they would have
to pay; only 12%
knew the interest
rate.
Late payers
experience
harsh practices
30% of clients
who had paid
late experienced
public shaming
or other
problems.
MFI that do not
return savings
9% of current
clients and 17%
of former clients
reported being
unable to
withdraw part or
all of their
savings.
Lack of effective
recourse
86% reported not
being informed
about where and
how to complain
if something goes
wrong.

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What Clients Told Us
“MFIs don´t inform you, they should give you complete information.We should be
able to understand, to see what our options are and what is best for us, to find the
product that suits us best.” Peru
“They explain, but when they see you are illiterate, they get you to sign papers which
mean that you’ll repay more than you should.” Benin
“MFIs don’t think that we can genuinely have problems…they don’t try to
understand.” Pakistan
“They ought to understand and be a bit flexible, giving a moratorium so that the
person can straighten things out, but that’s not often the case.” Benin
“The MFI offered me again to take loan but I didn’t agree…I told them that just for
being late once they have insulted me a lot.” Pakistan

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• Client Protection
Certification is an
independent, third-party
evaluation to publicly
recognize institutions that
meet standards of care in
client protection.
• 49 institutions have been
certified, representing
23 million clients
Client Protection Certification Program

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Smart Certification and Investors
Investors want a safe industry with a sound reputation. Certification
helps them identify financial institutions that put clients first.
• By directing investments to certified institutions, an investment fund
can send a strong message that it takes client protection seriously and
can communicate that to its investors.
• Through certification, investors incentivize their portfolio companies to
improve practices.
• With 49 institutions certified and dozens more preparing, investors can
use certification, preparation and willingness in selecting investees.
• Easier due diligence – certified institutions will be well-prepared on
client protection indicators.
• IDB, Deutsche Bank, FMO, and Oikocredit all look for the Smart
Certificate as an important factor in selecting investees.

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Thank you!
Please visit:
www.smartcampaign.or
g