From March to October 2014, Bankable Frontier Associates (BFA) conducted qualitative and quantitative research on consumer protection issues related to microfinance in Pakistan for the Smart Campaign’s Client Voices project. The Client Voices project investigates clients’ own understanding of what constitutes good and bad treatment in their dealings with microfinance providers (MFPs) in four markets: Pakistan, Benin, Peru, and Georgia.
First, qualitative research using focus group discussions and individual interviews was carried out to understand what constitutes good and bad treatment from MFPs from the clients’ perspective, and to probe widely for the types of problems that might be occurring that are specific to each market. Second, a national survey of 900 clients (currently borrowing or who have borrowed in the last three years) and a 100-respondent sample of non-clients was used to evaluate the prevalence of the problems mentioned in the qualitative research at a national level in Pakistan.
In this context of a relatively advanced consumer protection environment, the survey reveals that 85 percent report being either very satisfied or somewhat satisfied with their borrowing or savings experiences. However, the respondents reported surprisingly short relationships with MFPs as well as several consumer protection issues and problems. Client claims of harsh treatment and inflexibility in the case of late repayment, confusion regarding terms and conditions, and poor recourse options identify key challenges.