Microfinance Leaders Launch Campaign for Client Protection at Clinton Global Initiative

Microfinance Leaders Launch Campaign for Client Protection at Clinton Global
Initiative
Commitment at CGI announced by The Center for Financial Inclusion at ACCION;
founding partners include Al Amana, CGAP, Compartamos, Deutsche Bank, Freedom
from Hunger, Grameen Foundation, Opportunity International, Pro Mujer and
Women's World Banking

NEW YORK, Sept. 24 /PRNewswire/ -- The Center for Financial Inclusion at
ACCION International today announced a Campaign for Client Protection in
Microfinance-a broad-based initiative to unite microfinance providers in
commitment to the campaign standards for the appropriate treatment of
low-income clients. Founding partners of the Campaign include Al Amana
(Morocco), CGAP, Compartamos Banco (Mexico), Deutsche Bank, Freedom from
Hunger, Grameen Foundation, Opportunity International, Pro Mujer and Women's
World Banking.
Designed to maintain and extend the microfinance industry's dedication to
the welfare of its clients in a period of rapid growth, the campaign will
promote a Microbanker's Oath, akin to the Hippocratic Oath, articulating six
core principles:
Avoidance of reckless lending that creates over-indebtedness
Transparent and fair pricing
Collections practices that are not abusive or coercive
Ethical standards for staff
Recourse mechanisms for client problems
Privacy of client data

At the Clinton Global Initiative (CGI), the Campaign announced a
Commitment to Action to engage at least half of the world's 500 largest
microfinance institutions (MFIs) reporting to the MIX Market
(www.mixmarket.org) within the next three years. The MIX 500 MFIs serve an
estimated 65 million borrowers among the self-employed poor worldwide, 70
percent of them women. Ultimately, the Campaign envisions that tens of
thousands of people working in the microfinance industry will also personally
sign the Oath via a campaign website.
Beyond adherence to common principles, the Campaign will develop
implementation tools and certification standards to ensure that pro-consumer
practices are implemented. The Campaign also seeks to engage microfinance
investors, who have become increasingly active in monitoring the social
performance of financially self-sustaining MFIs.
"The profit versus nonprofit microfinance debate that has captured so much
industry energy this year is the wrong argument," said Elisabeth Rhyne,
managing director of the Center for Financial Inclusion. "The real challenge
is to maintain dual focus on rapidly scaling up outreach while meeting the
highest standards of client service and protection. The Campaign will foster
appropriate growth in microfinance by creating industry practices and
standards-ensuring that the social mission remains front and center."
"Investors have a crucial role to play as microfinance providers further
develop finance that works for low-income people," said Kate McKee, senior
policy advisor for CGAP. "This Campaign provides a vehicle by which investors
can both reward and support investment-grade MFIs that truly serve their
target populations and adopt policies, practices and products that safeguard
their clients' interests."
"The continued fallout from the subprime crisis is a sober reminder of the
devastation caused by abusive lending practices," said Alex Counts, president
of Grameen Foundation. "The Campaign is designed to ensure that microbankers
never forget whom they are serving and that they continue to act in their
clients' best interests."
The CGI commitment to a multi-year Campaign for Client Protection is an
outgrowth in part of the 'Pocantico Declaration,' a statement of principles
and concerns issued by 25 microfinance leaders brought together by Deutsche
Bank (DB) in April 2008 at the Pocantico Conference Center in Tarrytown, New
York. While applauding rapid growth and innovation in the delivery of
financial services to the world's poor, the Declaration calls attention to the
need to ensure that microfinance grows with transparency and without putting
the solvency of its clients at risk through over-indebtedness. The Campaign
aims to ensure that consumer protection practices and principles become part
of the DNA of the microfinance community.
About the Center for Financial Inclusion
The Center for Financial Inclusion pursues the proposition that low-income
people deserve high-quality financial services and that these services can
best be provided through commercial models that incorporate social purpose.
The Center works on behalf of the microfinance industry as a whole, serving as
a bridge that leverages private sector interest in the provision of financial
services for the poor. With an emphasis on deep collaboration, the Center is
outcomes-focused, setting specific goals and measures of accountability for
real-world change through inclusive finance. For more information, please
visit www.centerforfinancialinclusion.org
SOURCE The Center for Financial Inclusion

Caroline Mauldin, Communications Officer of Center for Financial Inclusion,
+1-202-393-5113 x1635, cmauldin@accion.org, or Bruce MacDonald, Vice
President, Communications of ACCION International, +1-617-616-1546,
bmacdonald@accion.org