> Posted by the Smart Campaign
Next Thursday we’re launching the Client Voices project, our four-country research investigation that went to the source and directly asked clients about their experiences with financial providers and their thoughts on what constitutes good and bad treatment.
The four studied countries are Benin, Georgia, Pakistan, and Peru. You might have seen our spotlighting the release of the Benin and Pakistan country reports here on the blog in the fall. On Thursday, we’re sharing those for Georgia and Peru, as well as a “synthesis report” that summarizes and analyses the key findings, takeaways, and recommendations across the four comprehensive country reports.
We have a few launch event opportunities for you to participate in. But first, we wanted to give you a glimpse into what’ll be released on Thursday…
Transparency. One of the overarching findings across the studied countries was that clients have an inadequate understanding of the basic aspects of their microfinance products. For example, in Benin, Pakistan, and Peru, 50 percent, 49 percent, and 43 percent of respondents indicated that they either somewhat or didn’t at all understand loan terms at the time of taking out their loan. Even when institutions are following mandated disclosure rules, this lack of understanding persists.
Here are a few soundbites of what clients shared during one-on-one interviews with researchers:
“A ciegas lo hacía… Hacía mis préstamos a ciegas.”
(“I was blind… I took out the loans blind.”)
–Mariana, Lima, Peru
“Quite honestly, I can’t tell you if [my loan] rate is 4 percent or 5 percent. Honestly, I can’t tell you… I can calculate the difference to be able to say that if I borrowed 400,000 CFA (US$827), [I pay] 435,000 CFA ($899) or 425,000 CFA ($878), but I don’t calculate the percentage.”
–Male with a Master’s in law, Cotonou, Benin
Researcher: “So did the MFP explain the interest rate to you?”
Respondent: “They explain, but when they see you are illiterate, they get you to sign papers which mean that you’ll repay more than you should.”
–Male, Parakou, Benin
“They provide different explanations in the beginning, but none of the creditors investigate the depth, because the interest rate is never what they tell you in the beginning. It is always more in the end… some is commissions, some life insurance, etc.”
–Male, Rural Telavi, Georgia
What to do about this? You’ll just have to wait until the release of the reports next week, which include broad-reaching recommendations across stakeholder groups for improving client protection.
As for the launch events, at the World Bank offices in Washington, D.C. on Thursday the Smart Campaign and Bankable Frontier Associates (BFA), which served as research partner on the project, will present key findings and discuss their implications for the industry. BFA will present the research results, with the Smart Campaign to follow with a response and sharing of key takeaways, and afterwards inclusion leaders and representatives from the study’s country markets will discuss how the project should impact industry efforts going forward.
Event speakers will include Caitlin Sanford, Director at BFA, Kim Wilson, Lecturer at the Fletcher School, Elisabeth Rhyne, Managing Director of the Center for Financial Inclusion, Xavier Gine, Lead Economist in the Development Research Group at the World Bank, Isabelle Barrès, Director of the Smart Campaign, and other financial inclusion leaders. For more details and to RSVP, click here.
And if you can’t make the D.C. event, at a later date we’ll host a webcast to discuss the project. Stay tuned for forthcoming details.
Have you read?
What Do Clients Care About? Results from Benin
What Do Clients Care About? Results from Research in Pakistan