> Posted by the Microfinance CEO Working Group

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What’s been happening with the Microfinance CEO Working Group (MCWG)? We’re glad you asked. Fresh-off-the-press is a new annual report from the MCWG, detailing the Working Group’s key accomplishments and activities of the past year. Consumer protection is among the standout areas for the MCWG for 2016. Over the course of the year, 14 local partners belonging to the MCWG network achieved Smart Certification, including BRAC Bangladesh, the first microfinance provider in the country and the largest in the world to reach the consumer protection milestone. In total, 21.9 million clients are served by 39 MCWG network Smart Certified institutions.

The MCWG is comprised of the leaders of 10 global microfinance organizations: Accion; Aga Khan Agency for Microfinance; BRAC; CARE; FINCA; Grameen Foundation; Opportunity International; Pro Mujer; VisionFund International; and Women’s World Banking. The newest member, added in 2016, is the Aga Khan Agency for Microfinance and its General Manager Jesse Fripp. The MCWG also harnesses the expertise of more than 40 senior staffers across the member organizations, who meet regularly across seven Peer Groups focused on specific areas of microfinance, from digital financial services, to social performance, to communications, taxation, and others. Members and local partners work with more than 89 million clients in 87 countries, providing them with financial services as well as other support to help them succeed and lift their families out of poverty.

The MCWG provides a forum for members to advocate on behalf of the microfinance sector, develop common industry standards, and share best practices in an effort to help organizations improve their services and expand their reach. The Working Group seeks to expand financial inclusion by leveraging longstanding expertise in the delivery of microfinance services and collaborating with those best positioned to scale quality financial services.

On consumer protection, a priority for the group, the MCWG advocates to the industry for the development and adoption of best consumer practices, and it also leads by example, encouraging the financial institutions in its network to take up these standards themselves. Along with the Smart Campaign and Smart Certification, the MCWG supports the Social Performance Task Force (SPTF). The results of the group’s testing of SPTF’s social performance management standards were incorporated into CERISE’s Social Performance Indicators Tool (SPI4), which is one of the most widely used assessment tools for double bottom line microfinance institutions. Over the past three years, 74 local partner institutions have conducted a SPI4.

The MCWG works with central banks to strengthen client protection regulations. The MCWG, in collaboration with Accion, New Perimeter (law firm DLA Piper’s global pro bono initiative), and the Smart Campaign, developed the Model Legal Framework for Financial Consumer Protection (MLF). In 2016, the MLF team particiapted in 12 events across seven countries, training more than 270 financial inclusion stakeholders, including more than 100 regulators and bank supervisors, on the MLF and the Smart Campaign’s underlying Client Protection Principles. Many of these regulators are using the MLF as a reference or even incorporating some of its suggestions directly as they develop their consumer protection regulations.

In March of 2016, the MCWG joined several industry voices to discourage interest rate caps being considered by the Central Bank of Nigera (CBN). It endorsed the creation of client protection regulations and provided suggestions on how transparency and responsible lending measures could help achieve some of the objectives of interest rate caps without the reduction of service to small borrowers that interest rate caps often cause. These efforts ultimately contributed to the CBN’s decision not to impose interest rate caps and instead work on a body of consumer protection regulations.

These are just some of the ways that the MCWG is working to strengthen the financial inclsuion industry and ensure the consumer is treated fairly.

The MCWG’s annual report also spotlights how the network is harnessing fintech and innovation. For example, in Bangladesh, BRAC’s app-based cash collection system has provided 8,500 tablets to credit officers, enabling them to do cash collection in the field. This paperless process will save time and money – an estimated $1 million per year – and allow credit officers to serve clients better by having information readily available.

For more, read the MCWG’s annual report, here.

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‘Model Law for Best Practice in Financial Consumer Protection’: An Important Driver for Universal Financial Access

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