Earlier this year, the Smart Campaign co-hosted a financial inclusion and consumer protection event in collaboration with the Microfinance CEO Working Group and the Association of Microfinance Institutions of Uganda in Kampala, Uganda. With more than 100 people in attendance representing diverse stakeholder groups, the event served as a platform to exchange ideas and commit to greater partnership to progress financial inclusion policies and practices, and consumer protection in Uganda.
The goal of the event was to provide an opportunity to obtain clear commitments in support of the key themes and objectives of Uganda’s developing national financial inclusion strategy, and to place consumer protection at the heart of its roll out. The convening brought a variety of stakeholders together, including financial service providers, donors, researchers, government ministries, and the Bank of Uganda, to support the country’s consumer protection goals and facilitate better collaboration.
After hearing the perspectives and inputs of the key sector stakeholders in attendance, we took stock of our three-year strategy for the country. Going forward, the Campaign’s approach will focus on the following:
- Training regulators on the client protection-based Model Legal Framework to identify improvements and provide recommendations to existing and future laws and regulations
- Helping to develop guidelines for Tier IV institutions, which include microfinance institutions (MFIs) and savings and credit cooperatives (SACCOs)
- Training the recently created Uganda Microfinance Regulatory Authority (UMRA) on how to conduct client protection-focused inspections of MFIs and SACCOs
One theme that emerged during the event was the importance of consumer financial education. By the end of the event, all parties had agreed that provider-led client protection efforts would only yield results if consumers’ education and capacity improved in tandem. Furthermore, the whole sector would benefit if consumers were better equipped to navigate the risks of financial products while aware of their rights and responsibilities as a consumer. It’s in the regulator’s best interest to have capable consumers, as this supports a safe and stable financial system. It’s also in the providers’ interest, as financially capable individuals represent lower risk, the potential for enhanced product use, and the opportunity for long-run growth as consumers. These assertions reinforce our future plans to implement a radio campaign that will address the challenges and gaps in information that microfinance clients face and how to overcome them.
A follow-up convening to be held in 2018 will center on the prevention of over-indebtedness and the value of utilizing credit bureaus.
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