NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, May 8, 2015

When our team first started doing this work four years ago, I used to get asked all the time, “So are you giving out mobile phones?” We use mobile technology to reach invisible populations like factory workers, farmers and, most recently, microfinance borrowers. In the last four years, mobile penetration has continued to skyrocket. India has three times as many mobile phones as the United States, and 78 percent mobile penetration. So the answer is no, we do not need to give out mobile phones.

Two years ago, some folks in the microfinance industry asked if we might take our experience of giving factory workers an anonymous channel to report on working conditions and apply that to microfinance borrowers or “clients” in countries like India and Peru. The need is the same. When a woman in India takes out a small loan to sell tea at the local market, she borrows from a local Microfinance Institution (MFI) and her main point of contact with the MFI is her loan officer. If she faces some type of mistreatment by the loan officer, or feels unable to keep up with her loan payments, she may not have another channel to report those issues anonymously — in a way that will not compromise her ability to get loans in future.

Enter the Smart Campaign. Starting in 2008, leaders in microfinance started coming together around the idea that microfinance should be first and foremost about the borrowers, the woman with the tea stand and the millions of others who are positively impacted by small loans around the world every day. Smart Campaign partners and sponsors — including Ford Foundation, The MasterCard Foundation and USAID — developed a set of Client Protection Principles for the industry to follow.