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Up for Review: the Client Protection Principles at Fundación Paraguaya

Consider this the sequel to my last story about the Client Protection Principles. Planet Rating is visiting this week to conduct an organization-wide evaluation in order to decide if Fundación Paraguaya will be eligible for SmartCampaign certification.

(Tip: If some of these names do not sound familiar, probably better to read the prequel first).

Planet Rating has been so nice to let me join them on one of the days, which at the time of writing was yesterday. We visited the branch of Villa Elisa, a city in the Central Department of Paraguay that borders with the capital Asunción. At the branch, Anali from Planet Rating conducted interviews with three focus groups:

  1. Asesoras & Oficiales de Crédito
  2. A group of 8 male clients
  3. A group of 5 female clients (we hoped it would be more)

Some of the more interesting observations were:

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Protecting clients in microfinance

Imagine you are a farmer with a few scattered small plots of land where you cultivate beans, peanuts and maize. There is a machine you would like to buy that helps you harvest the land more efficiently . This way, you spend fewer hours in the field, and will have more time to earn additional income for the family by doing motor repairs in the community. However, you barely have any savings at the moment because you spent most of it on unexpected medical expenses for your five-year-old child. You decide to take out a loan at a microfinance bank. After a visit to the bank where you indicate your interest in a loan, a loan officer visits you two days later at your home to see if your business actually exists, and to gather financial information about the costs and income that your family has (not just the farming activity). You have all this information more or less in your head (there is no written administration) and you share it with the loan officer. After the loan officer has done the financial analysis back in the office, he/she calls you to say you have been accepted as a new client and you make an appointment to come to the office to sign the contract and other formal documents before you can take out the loan. There is only one problem…you don’t know how to read.

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How the Internet saved my Ambassadorship

The hope I had to go to Dar Es Salaam while writing my fist post is now all faded. Long story cut short: I’ll have to wait until next time to visit beautiful Tanzania, as my proud-to-be-Tanzanian friends call it. However, readers, please thank God for the Internet. That amazing invention allows you to be in a place without actually being there. I know this doesn’t make much sense, but  bear with me for a second.

First, let’s talk about the project I was supposed to be working on with my fellow Accion Ambassador Sifael Ndandelathe Smart Campaign Certification project. The scope of this project makes it essential for a person to be on site to be able to assess the compliance of a microfinance institution with the seven client protection principles. Indeed, the chore of the Smart Campaign Project is to really make sure that microfinance institutions keep their clients’ needs at the center of their activities. You are therefore assessing the interactions between one institution and its clients: from the policies that direct that relationship to the practice of it. This calls for an immersion into the relevant environment in order not to miss out on a lot of acting forces.

However, what if you are not able to make it to that relevant environment for some reasons? (In my case the reason is quite simple: being a Senegalese trying to go to Tanzania ABSOLUTELY requires you to have a referred visa which means that your visa application can only be processed in Tanzania and that can take months).  Well, you have your savior THE INTERNET to allow you to do at least some of the job.

  • Skype: As an incomplete substitute to a face to face conversation, you have this amazing software application that, besides hearing a voice, allows you to see the facial expression, hand gestures with which a word was said to give you a fuller understanding of a context.
  •  Viber and whatsapp:  All you need for these is an internet connection and you are free to speak with or text your interlocutor as much as you want.  I believe these are perfect ways to coordinate meetings: they are fast plus they are excellent informers (when your message is received and seen, you know it is received AND it is seen)
  • VoIP phones: These are my favorites so far. While the two above requires both you and your interlocutor to have an internet connection to be able to speak for free, with VoIP phones not only do you speak for free (well you just need to pay your internet bills), but the person you are talking to doesn’t need to have an internet connection. For the conservative ones (like me), VoIP phones are just like normal phones, even better – and I have access to one in the Accion Ghana Hub office!

These three have been my best buddies, allowing me to speak with my project partner as well as the relevant people to assist on the Client Protection Principles self-assessment of one of our partners.  They are not without their challenges (number one being access to good internet connection in the first place) but they do offer a new dimension to international collaborations. Now, human beings, let us further our hologram technologies to be able to teleport ourselves and then we can fully enjoy the benefits of international collaboration without major challenges! (Always wishful thinking!)  Continue reading


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The Future of Microfinance: Transparency, Accountability, and Client Protection

Over the last decade, the microfinance industry has been challenged over its efficacy as a development strategy, and whether lending practices authentically reflected the needs of clients. In the Ambassador’s training a month ago (mentioned here by Kate McGrath) at Accion’s Headquarters in Boston, we discussed how the industry has changed in response to those criticisms. A major part of those changes was spearheaded by  leading microfinance organizations, institutions, and networks like Accion, who came together to create a series of principles that protect clients and institutions by ensuring that financial products enable client development and manageable risk.

The Smart Campaign was the result of those collaborations, and independently developed a series of Client Protection Principles for microfinance institutions (MFIs). MFIs now have the option of going through a rigorous certification process to improve their transparency and efficiency, and harken back to the development roots of the industry (or at least of Accion and other non-bank actors).

The seven Client Protection Principles cover all facets of the lender-client relationship, and in order to be Client Protection Certified, organizations must meet all principles (a current list of certified organizations is available here). The following is a summary of those principles (adapted from here):

  1. Appropriate product design and delivery

Organizations provide products that do not harm clients—products and methods of delivery are designed to best accommodate the needs of clients and potential clients. Continue reading