30 Apr 2014
Over the past five years, the microcredit sector has experienced unprecedented growth. The number of borrowers served by microfinance institutions (MFIs) has increased threefold to reach 120 million clients, according to MIX estimates as of December 2009—and by other estimates the number may be as high 190 million (Microcredit Summit Campaign 2011). In large markets, such as Mexico and South Africa, commercial banks and consumer lending companies have expanded their […]
24 Apr 2014
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Katharine McKee
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Estelle Lahaye
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Antonique Koning
Early microfinance pioneers created the sector with the aspiration to improve poor people’s lives. There were huge swathes of “white space” where low-income households had little or no access to formal finance. This challenge, in turn, demanded sustainable and scalable models for delivering adequate financial services to poor people. This is the essence of the double bottom line in microfinance: a social commitment to benefiting clients married with a financial […]
24 Apr 2014
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Sarah Forster
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Estelle Lahaye
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Kate McKee
Client protection is a key tenet of microfinance. This is demonstrated by the extraordinarily large number of organizations that are endorsing the Client Protection Principles—a set of global principles aimed at ensuring microfinance clients are treated fairly and responsibly and do not become over-indebted. Although the Client Protection Principles are widely agreed upon, deeper implementation of the principles and ways of monitoring them, both at the microfinance institution (MFI) and […]
24 Apr 2014
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Jessica Schicks
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Richard Rosenberg
Microcredit has long had an enviable repayment record—levels of delinquency and default have been very low. But more recently, collection problems have appeared in some major markets.In a review of four countries, Chen, Rasmussen,and Reille (2010) reported that delinquent loans,which averaged 2 percent of portfolio in 2004,skyrocketed to 2009 levels of 7 percent in Bosnia–Herzogovina, 10 percent in Morocco, 12 percent in Nicaragua, and 13 percent in Pakistan. In some […]
24 Apr 2014
In the last fifteen years, financial systems in the Americas have experienced substantial regulatory and institutional changes as a result of periods of crisis. These changes reflect financial sector authorities and regulators ´ search for sustained economic growth in the region, under stable financial conditions and having removed barriers for the adequate provision of financial services. In this regard, the provision of financial services has become a priority in various […]
27 Aug 2013
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Michel Hanouch
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Sarah Rotman
In January 2012 a new banking business was about to emerge in the Philippines. After being in the wholesale microfinance lending business for two years, BanKO (which is licensed as a savings and thrift bank) was ready to jump into retail microfinance by using the mobile phone as its main channel. With years of experience at Bank of the Philippine Islands (BPI), Chief Executive Officer (CEO) Teresita Tan knew all […]
06 Mar 2013
The global financial crisis highlighted the importance of financial literacy and capability, because the lack of consumer knowledge played a role in the genesis of the crisis. To become more active and confident participants in the financial sector, consumers need awareness, understanding, and knowledge about various types of rapidly evolving financial products and services and associated risks, such as fraud and over-indebtedness. As the variety and complexity of financial products […]
06 Mar 2013
Codes of conduct are fundamentally an effort at self-regulation, whether they apply to one organization, such as a microfinance institution (MFI), or an association and its members. Th is Technical Note explores the variety of reasons why and how microfinance associations may choose to adopt and promote self-regulation through a code of ethics or code of conduct. In this Note, three case examples are presented that illustrate three different approaches […]
06 Mar 2013
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Emily Zimmerman
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Barbara Magnoni
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Andrea Camargo
This paper explores challenges and good practices in consumer protection in microinsurance, defining “consumer protection” as the effective use of microinsurance products by low-income consumers to protect themselves against risk. Consumer protection challenges fall into four main categories, 1) education and information, 2) product and process design, 3) regulation and financial soundness of providers and programs, and 4) capacities and responsibilities of stakeholders. The paper develops a “checklist” of attributes […]
10 Sep 2011
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Katharine McKee
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Estelle Lahaye
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Antonique Koning
Early microfinance pioneers created the sector with the aspiration to improve poor people’s lives. There were huge swathes of “white space” where low-income households had little or no access to formal finance. This challenge, in turn, demanded sustainable and scalable models for delivering adequate financial services to poor people. This is the essence of the double bottom line in microfinance: a social commitment to benefiting clients married with a financial […]
