We use existing data in innovative ways to help us better understand the experience of the fund’s beneficiaries.
There has been a shift in focus in recent years from general concern about poverty alleviation to a desire for more disciplined measurement of the direct outreach and inclusion of microfinance investments. Microfinance investors have also moved away from a unilateral and simplified view of the sector and have developed a more elaborate understanding of its shared profits and mutual social benefits in the current context of ongoing globalization.
In essence, the principal impact that microfinance strives to achieve is to improve the economic wellbeing of microfinance clients: to help them grow their businesses, increase their incomes and create greater economic stability and security.
This has led investors and practitioners to increase the emphasis they put on the level of social responsibility in order to safeguard and ensure long term positive impact and sustainable wealth creation.
The best practice standards of the Smart Campaign are required for all microfinance institutions we do invest in.
Responsible financial inclusion encompasses core Client Protection Principles to help financial service providers practice good ethics and smart business. The Client Protection Principles are the minimum standards that clients should expect to receive when doing business with a microfinance financial service provider.
All out investment institutions must be fully transparent in the pricing, terms, and conditions and work with clients to prevent them from borrowing more money than they can repay or using products they do not need. Responsible financial inclusion protects clients, businesses, and the industry as a whole. And therefore, one key criterion of the Enabling Microfinance Fund is that all microfinance institutions in the portfolio must adhere to those best practice standards set by the Smart Campaign.
Appropriate Product Design and Delivery
Products are designed to be appropriate to client needs; client feedback is sought for product design and delivery.
Robust processes are used to verify repayment capacity of clients; credit bureau data is checked systematically (when applicable).
The total cost of the loan, including all charges, is communicated to clients both verbally and in writing.
Prevention of Over-indebtedness
Market-based, non-discriminatory pricing is applied and excessive fees are not charged
Clients are informed of their rights; both in-house and third-party collection staff are trained on fair and responsible treatment of clients.
Fair and Respectful Treatment of Clients
Client confidentiality is protected with appropriate technology systems.
Privacy of Client Data
Clients are aware of how to submit complaints; the complaints resolution system is active and effective.
Mechanisms for Complaint Resolution
"The dual approach is an important factor in strengthening the sector as a whole"