MFTransparency, a US-based nongovernmental watchdog that focuses on interest rates in the microfinance industry, recently expanded its Transparent Pricing Initiative to Rwanda to educate citizens in that country on interest rates in an effort to impel microfinance institutions (MFIs) in the country to lower microfinance interest rates. Plans for this expansion were announced on this website in October.
The initiative, which is already operational in Uganda, Kenya and Tanzania, aims to “facilitate transparent pricing in microfinance products so that all stakeholders can be aware of the value of microloans in the market,” said Jordan Filko, of MFTransparency. This is done through training for and interest rate disclosure to local MFIs, funders and other organizations.
MFTransparency partnered with the Association of Microfinance Institutions in Rwanda (AMIR) to launch the project, which is part of a larger initiative called the Enabling APR and EIR Program (Enabling Africa to Price Responsibly and Educate on Interest Rates), which is sponsored by the MasterCard Foundation of Canada. The program is planned for expansion in Ghana, Zambia, South Africa and Mozambique [1, 2].
By John Howard-Smith
About MFTransparency: MFTransparency is a nongovernmental organization that aims to provide “information on credit products and their prices in a clear and consistent fashion” for the microfinance industry. MFTransparency collects data on the interest and fees charged on microfinance loan products in order to calculate the effective interest rates on those loans. Its intention is to establish the industry standard for pricing disclosure and to facilitate a fair exchange of microfinance products between suppliers and consumers. MFTransparency was launched in July 2008 and is based in the US. According to its website, as of December 6, 2009, it has been endorsed by 264 “industry leaders” that serve 80 million clients globally.
About the Association of Microfinance Institutions in Rwanda (AMIR): The Association of Micro Finance Institutions in Rwanda (AMIR) was established in June 2007 as a forum for capacity building, advocacy research and development for microfinance institutions (MFIs) in Rwanda. The network also aims to foster information exchange and transparency. As of 2010, AMIR has 84 active members serving poor and middle-class families.
About the MasterCard Foundation: Based in Canada, the MasterCard Foundation is a private foundation with approximately CAD 2.69 billion (USD 2.72 billion) in assets, as of 2009. The foundation’s goal is to enable people living in poverty to improve their lives through increased access to microfinance and education. The foundation was established in 2006 by a gift of shares from global payment processor MasterCard Worldwide during the company’s initial public offering.
[1] The EastAfrican: “Interest Rates on Microloans in Rwanda to Drop”, http://www.theeastafrican.co.ke/news/Interest%20rates%20on%20microloans%20in%20Rwanda%20to%20drop/-/2558/1082314/-/2lldr7z/-/
[2] MicroCapital.org story, October 28, 2010: “MICROCAPITAL BRIEF: MFTransparency Launches Transparent Microfinance Pricing Initiative in Rwanda and Uganda”, https://www.microcapital.org/microcapital-brief-mftransparency-launches-transparent-microfinance-pricing-initiative-in-rwanda-and-uganda/
MicroCapital’s Microfinance Universe profile: MFTransparency, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MFTransparency
MicroCapital’s Microfinance Universe profile: The Association of Microfinance Institutions in Rwanda (AMIR), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+of+Micro+Finance+Institutions+of+Rwanda
MicroCapital’s Microfinance Universe profile: The MasterCard Foundation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MasterCard+Foundation
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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