MICROCAPITAL BRIEF: Multilateral Investment Fund (MIF) to Support Smart Campaign to Improve Client Protection in Latin American, Caribbean Microfinance Institutions

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank, will be providing unspecified support to the Smart Campaign, a consumer protection initiative, in its work to assist Latin American and Caribbean microfinance institutions (MFIs) in implementing client protection practices in their daily operations. The Smart Campaign’s Client Protection Principles are “appropriate” product design and delivery, prevention of over-indebtedness, transparency, responsible pricing, fair and respectful treatment of clients, privacy of client data and mechanisms for complaint resolution. The Smart Campaign will encourage MFIs to implement these principles by: understanding the current state of client protection practice via in-depth client protection assessments of 20 MFIs; changing client protection practices via pilot implementation and recommendations from the assessments; piloting the process of certifying ten MFIs in their adherence to client protection principles; and making Smart Campaign tools more broadly available in Latin America through translation and dissemination of those materials in Spanish and in Portuguese.

The 487 MFIs in Latin America and the Caribbean that report 2010 data to the US-based nonprofit Microfinance Information Exchange (MIX) held an aggregate gross loan portfolio of USD 22.9 billion disbursed to 15.1 million borrowers.

By Charlotte Newman, Research Associate

About Smart Campaign
The Smart Campaign, which was founded by US-based nonprofit ACCION International and is located at ACCION’s Center for Financial Inclusion in Washington, DC, is an “effort to unite microfinance leaders around a common goal: to keep clients as the driving force of the industry.” It promotes seven core consumer protection principles including: “appropriate” product design and delivery, prevention of over-indebtedness, transparency, responsible pricing, fair and respectful treatment of clients, privacy of client data and mechanisms for complaint resolution. As of October 2011, approximately 1,900 microfinance institutions (MFIs), microfinance support organizations, investors, donors and individual industry professionals have endorsed the Smart Campaign.

About Multilateral Investment Fund
Multilateral Investment Fund (MIF) is an autonomous fund that was founded in 1993 by the Inter-American Development Bank (IDB). Now a member of the IDB Group, MIF has 39 donating member countries from Latin America, the Caribbean, North America, Europe and Asia. MIF reported having approved 102 projects and committed USD 116 million for new projects in 2010. The level of assets held by MIF is not available.

Sources and Additional Resources:

Center for Financial Inclusion Blog: “MIF Supports Improvement of Microfinance Client Protection Practices in Latin America and the Caribbean,” https://centerforfinancialinclusionblog.wordpress.com/2012/01/30/mif-supports-improvement-of-microfinance-client-protection-practices-in-latin-america-and-the-caribbean/#more-5102

MicroCapital.org story, January 26, 2012, “MICROCAPITAL BRIEF: Microfinance CEO Working Group Issues Road Map for Microfinance Industry Promoting Smart Campaign, Microfinance Transparency, Social Performance Task Force,” https://www.microcapital.org/microcapital-brief-microfinance-ceo-working-group-issues-road-map-for-microfinance-industry-promoting-smart-campaign-microfinance-transparency-social-performance-task-force/

MicroCapital Universe Profile: Smart Campaign
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SMART+Campaign

MicroCapital Universe Profile: Multilateral Investment Fund
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Multilateral+Investment+Fund+%28MIF%29

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