Jeffrey Riecke

First Microfinance Institutions in Latin America Certified for Strong Client Protection Practices

(Posted by Jeffrey Riecke, on behalf of the Smart Campaign)

Washington, D.C. (October 9, 2013) – The Smart Campaign, a global initiative to incorporate strong client protection practices across the microfinance industry, today announced the first three microfinance institutions in Latin America to become Client Protection Certified for meeting strong standards of client care: Pro Mujer Mexico, andFundación Mundo Mujer Popayan and Crezcamos in Colombia. They join six other institutions from Eastern Europe and South Asia that have all been certified since the program launched in January 2013. Together, the nine certified institutions serve more than 2.1 million clients worldwide and there are many more institutions on their way to certification.

Client Protection Certification publicly recognizes those institutions providing financial services to microentrepreneurs whose standards of care uphold the Smart Campaign’s seven client protection principles, covering such important areas as pricing transparency, fair and respectful treatment, and prevention of over-indebtedness.

“As this program grows, we envision the Client Protection Certification becoming a widely-recognized, distinguishing mark, like Fair Trade, that signals to clients, investors, internal stakeholders and the general public that its bearer upholds strong client protection principles,” says Elisabeth Rhyne, Managing Director of the Center for Financial Inclusion at Accion where the Smart Campaign’s secretariat is housed.

The Client Protection Certification Program contains a rigorous set of standards against which institutions are evaluated by independent, third-party raters that are licensed by the Smart Campaign. The raters – Planet Rating, M-CRIL, MicroFinanza Rating andMicroRate – are established, specialized microfinance rating agencies with deep experience, having analyzed hundreds of institutions to date.

“We extend our heartfelt congratulations to the newly-certified institutions,” said Isabelle Barrès, Director of the Smart Campaign. “Their willingness to do the work it takes to prepare for and undergo the intensive process of evaluation is indicative of their deep commitment to their clients. They have shown that a high bar is achievable in the area of client protection. Their example will catalyze a movement towards certification within the broader industry.”

For more than three years, Fundación Mundo Mujer Popayan has demonstrated commitment to client protection, beginning with an assessment by the Smart Campaign, and participating as a best-practice example in the “Treating Clients with Dignity at FMM Popayan” Smart Note. Crezcamos first approached the Smart Campaign when it wished to train its loan officers on how to follow the client protection principles in their day-to-day operations. After doing a self-assessment, the institution commissioned a certification mission with Microfinanza Rating and made significant improvements to policies and practices to bring them into alignment with the indicators. Pro Mujer Mexico, the first institution in Mexico to be certified, demonstrates that even in countries with high competition and market saturation, providers can still comply with the principles and remain sustainable.

The Client Protection Certification Program is possible because of partnerships with the MasterCard Foundation, Ford Foundation, the International Finance Corporation, the Multilateral Investment Fund (member of the IDB Group) and microfinance pioneer Accion. It has been shaped through cooperation with dozens of supporting organizations, notably the Smart Campaign co-founder, the Consultative Group to Assist the Poor (CGAP).