Posted on November 12, 2008 - by James
Organizations Sign Client Protection Principles to Ensure Fair Treatment and Financial Protection of Low-Income Microfinance Clients
In late October, 35 microfinance institutions (MFIs) and investment funds signed the Client Protection Principles (CPP), a list of pro-consumer principles and mandates that aims to become an industry-wide standard for ensuring the fair treatment and financial protection of low-income microfinance clients. The CPP are part of a larger campaign launched in September of 2008 at the annual meeting of the Clinton Global Initiative, a conglomeration of governments and public and private organizations dedicated to sustainable development, with the goal of incorporating at least half of the world’s 500 largest MFIs within the next three years. According to Consultative Group to Assist the Poor (CGAP), there is little evidence of client abuse in the microfinance sector.
These principles are the product of the aggregated experience of several MFIs, microfinance networks and other public microfinance organizations that have developed consumer-friendly conduct and practices. Signatories to the CPP have committed to translating the principles to a host of different clients, products and situations, says CGAP. Casting this wide net will require, says CGAP, that each signatory ensure the compatibility of its investment selection and oversight processes with the CPP. Currently, there is no oversight board or regulatory body in place for promoting CPP compliance and no mechanism for determining the nature and extent of each institution’s efforts… [click here to read the rest of this article...]
