RBAP stands behind pricing transparency initiative for microfinance

MF Transparency seminar 1The Rural Bankers Association of the Philippines (RBAP) joined the Microfinance Council of the Philippines (MCPI) in hosting a series of pricing transparency workshops in Davao, Manila and Iloilo City in March 2011.  Led by MFTransparency, representatives from various rural banks, cooperatives, and NGOs involved in microfinance came together in an effort to take a proactive stand to come up with a more standardized way to disclose transparent pricing of their microfinance products.

MFTransparency, a non-profit organization based in the United States, was founded in July 2008 with the mission of becoming “the venue for the microfinance industry to publicly demonstrate its commitment to pricing transparency, integrity and poverty alleviation”.

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At the Manila workshop, RBAP President Cora Miller (leftmost photo) shared her viewpoints on promoting greater transparency and disclosure standards for all financial institutions.  In her speech, she stated that “the issue of pricing is symbolic of the industry’s need to be proactive and to show that we (the rural banks), as an industry, are committed to serve our customers in a highly ethical and open manner. By doing so, we are better prepared to overcome and address criticisms leveled upon the industry.” According to Ms. Pia Roman Tayag (center photo) from the Financial Inclusion Unit of the Bangko Sentral ng Pilipinas (BSP), “responsible disclosure should not just be a regulatory concern but also a concern of the microfinance industry.” In her speech, Ms. Mila Bunker (rightmost photo), MCPI Chairperson, underscored the need for different microfinance providers from the NGOs, cooperatives and rural banks to agree to champion transparency as good practice to protect both their clients and their institution.

Mr. Chuck Waterfield, CEO & President of MFTransparency shared how the Philippine microfinance sector had actually provided a much broader and deeper reach of microfinance services and much smaller loan sizes than microfinance institutions (MFIs) in many other countries. He also shared the three principles that MFTransparency promotes to maintain a healthy microfinance industry including:

  1. Greater Consumer Protection
  2. Transparency of Financial Information
  3. Dialogue with governments about appropriate regulation

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He pointed out the importance of this initiative in directing MFI’s in making guided decisions in pricing their loan products considering other external factors such as market competition while taking into account the changing needs of the client.  Gathering data from MFIs willing to participate, analyze and share their interest rates in a uniform and consistent method would keep the public aware of the true prices of microfinance loan products.

RBAP President Cora Miller summed up the proactive approach of the sector by sharing that “by demonstrating our seriousness in tackling these issues, we show to the world that the Philippine microfinance industry is at the forefront of change and remains among the best!”

To date, MFTransparency has worked with over 700 microfinance institutions around the world, serving more than 107 million clients in countries including India, Cambodia, Peru, Bolivia, Argentina, South Africa, to name a few. Detailed information about the work of MFTransparency and the data they have consolidated and published can be viewed at their website http://www.mftransparency.org.