How Smart Assessments and Client Protection Certifications Work Harmoniously

> Posted by Alyssa Passarelli, Communications and Operations Assistant, the Smart Campaign 

Smart CampaignThe launch of Client Protection Certification in January 2013 is a significant milestone for the Smart Campaign and for the financial inclusion community. As an initiative that is the first of its kind, it shifts awareness of client protection in microfinance to an industry standard. The Smart Campaign and the licensed certifiers have been working diligently to get the word out about certification to help build engagement and a market for this important program.

A frequent request from participants in the certification webinar series was to clarify the difference between a Smart Assessment and a Client Protection Certification mission. While they differ in purpose, the important message is how they work hand-in-hand. Both assessments and certification are based on the 30 adequate standards of care rooted in the Smart Campaign’s seven Client Protection Principles (CPPs).

  • An assessment is a report for management. It used the standards as reference to give an in-depth-“diagnostic,” with a grade of the MFI’s practices. The Smart Campaign recommends Smart Assessments as an excellent way for an MFI to prepare itself for certification.
  • Certification is aimed at the stakeholders of an institution. It applies the standards as a firm benchmark for achievement that merits certification. With certification, a financial institution can tell clients, investors, and regulators that it takes adequate care to ensure that its clients are protected.

A Smart Assessment typically lasts four to five days and is conducted by two trained assessors who examine an MFI’s policies and procedures, as well as interview staff and clients. After the assessment field-visit, the MFI receives a lengthy and detailed confidential report that presents the assessors’ comments on each indicator, grading, and supporting evidence. As such, a Smart Assessment is a very useful opportunity for an MFI to see which areas of operations are in adherence with the standards and which need improvement. The cost of an assessment will vary depending on the MFI and the partner with which it collaborates. To date, the Smart Campaign has conducted over 75 assessments across the globe. Most of the organizations that are now Client Protection Certified first underwent an assessment to make sure they were prepared for the certification mission. You can learn more about Smart Assessments from Sergio Guzmán, Lead Specialist for the Smart Campaign.

A Client Protection Certification mission is also an evaluation of whether a financial institution adheres to the CPPs. The focus is on whether or not the MFI meets the standards. This does not require an in-depth diagnostic report and so a certification mission results in a short, definitive output. An organization is certified if it meets all the standards (and the report is short and public). If it does not meet all the standards, the report remains confidential. It identifies the standards that are not met, giving some indication of what would be needed to achieve a passing grade. Certification missions are best carried out when the MFI believes it sufficiently adheres to the Smart Campaign’s standards for client protection. To apply for certification, an MFI must contact one of the Campaign’s four licensed certifiers and fulfill all 30 adequate standards of care. Like a Smart Assessment, the cost of a certification mission will vary depending on the licensed certifier.

The certification journey will not be the same for each MFI, because every institution has its own unique history, values, priorities, and capabilities. As Smart Campaign Director Isabelle Barres commented during the webinars, “It is perfectly reasonable to expect that it will take some MFIs time to become certified, but it is most important that they are on the path.”

The Campaign will continue to create and disseminate resources for organizations to strive toward certification. These will include training of trainers for assessments, certification webinars, and tool creation, in all the campaign’s official languages. Stay tuned to the Smart Campaign’s website and social media channels for updates, new resources, and upcoming events. We welcome and encourage feedback from all of our partners on their needs and goals regarding client protection.

Have you read?

A Refresher on Smart Assessments? Let’s Go to the Videotape!

The Smart Campaign Challenges Investors to Get Involved With Certification

Microfinance CEOs: Smart Campaign Certification is a “Clear Step” Toward Responsible Microfinance


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