Responsible Finance Forum

Responsible Pricing: Field Evidence

01 June 2017
Source:  MicroFinanza Rating

Responsible pricing remains a challenging issue with no clear-cut answers. However, key guidelines and tools have been developed to guide FSPs in strategic decision making. Notably, they include MFTransparency’s proposed approach to defining balanced pricing and the Smart Campaign’s new framework grounded in “assessments by induction” that replaced the market-based comparative approach to assessing fair pricing in client protection certifications. At the core of these frameworks is the understanding that the main variables influencing pricing are profit and operating efficiency, over which FSPs have reasonable control.

MicroFinanza Rating would like to share its experience in assessing responsible pricing and to provide some operational guidance to financial service providers (FSPs) to promote best practices. The recommendations presented here largely draw upon the research and guidance provided by responsible inclusive industry stakeholders, namely MFTransparency, Smart Campaign, and the Social Performance Task Force.