> Posted by Alyssa Passarelli and Jeffrey Riecke, the Smart Campaign and CFI

One good deed often leads to another. Whether it’s by learning about new opportunities to do good or by an increase in peer pressure, positive changes are contagious. This also applies to business practices, including how financial institutions treat their clients. Still new on the microfinance scene, the Client Protection Certification program has certified six MFIs to date – three in India and three in Bosnia and Herzegovina. As more institutions become certified, it increasingly changes the expectations for how financial institutions are to serve the poor, especially the expectations in markets where groups of institutions have been certified, like those in India and Bosnia and Herzegovina.

Smart Campaign Director Isabelle Barrès recently traveled to Bosnia and Herzegovina for an event to publicly congratulate and recognize the country’s three MFIs that were certified earlier this year, EKI, Mi-Bospo, and Partner. Organized by stakeholders in the Bosnian market, in particular the IFC, the event also highlighted the significance of certification, for the institutions and for the market at large. Of the three Bosnian MFIs Isabelle said, “The three client protection certified financial institutions, EKI, Mi-Bospo and Partner, can distinguish themselves in a highly competitive market, as organizations that are meeting adequate standards of customer care. They deserve the spotlight, and the attention from responsible funders and from clients.”

The achievements of these three MFIs and the Bosnian microfinance market are deepened when considered in the context of recent history. It was just in 2008 that the country’s industry experienced an over-indebtedness crisis, where at its peak around 28 percent of all MFI clients were described as “seriously indebted or over-indebted.” In the local microfinance market today, three of the 15 MFIs shown on the MIX Market are Client Protection Certified. In other words, 20 percent of MFIs in Bosnia and Herzegovina meet the 30 adequate standards of care in the treatment of their clients – including Client Protection Principle 2: Prevention of Over-Indebtedness.

Having three of Bosnia and Herzegovina’s MFIs certified is a great start, but as with all good deeds, there’s a component to consider that’s almost as important as the deed itself: Does anyone actually know about this? Do current and prospective Bosnian MFI clients know about and understand certification? In addition to offering EKI, Mi-Bospo, and Partner their much-deserved congratulations, the recent event – and its extensive press coverage – served as part of a planned outreach campaign to make Bosnian clients aware of the meaning of certification. Without this awareness, clients are missing out on support that could be the difference between enrolling in microfinance services that are an empowerment and enrolling in microfinance services that are a detriment.

The Smart Campaign welcomes your support in getting the word out on certification in the Bosnian market and elsewhere. If one good deed truly does lead to another, this will help certification shape the landscape of microfinance in good time.

Image credit: the Smart Campaign

Have you read?

How Smart Assessments and Client Protection Certifications Work Harmoniously

The Smart Campaign Challenges Investors to Get Involved With Certification

How Client Protection Certification and Ratings Work Together