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  1. Transparency Training recipients attending not fewer than 6 hours of instruction and not more than 20 hours of instruction are heretofore obligated to compensate the training institution a fee equivalent to $100 per training day, with the exception of days in which the recipient did not attend more than 75% of the instruction time.

  2. Objectives Understand why transparency is important Describe good transparency practices Identify Smart Campaign tools for improving transparency

  3. Transparency The Principle in Practice: Providers will communicate clear, sufficient, and timely information in a manner and language that client can understand, so that clients can make informed decisions. Consider this: Transparency is a pre-condition to many of the other principles—foremost, responsible pricing.

  4. Lack of transparency affects the client and the FI Lack of transparency Effects the… FI… Client… 1 …loses business when client tells others about her experience. …sees that her savings have decreased and thinks the bank has robbed her. Client does not understand the maintenance fees for her savings account. 2 …loses benefit of investment in new technologies. …is demoralized and does not trust ATM transactions. Client is not awarethat she receives only three free ATM withdrawals before incurring fees. 3 …finds that products intended to add value and attract clients actually have the opposite effect. …concludes that insurance is a scam when she does not have the premium returned. Client believes that if she does not file an insurance claim, the premium will be returned to her.

  5. Lack of transparency affects the client and the FI Lack of transparency Effects the… MFI… Client… 4 …reputation is at risk. …thinks the loans are expensive and the FI hides costs Client is not aware of the penalty charges on late payment of loans 5 …repeat business is at stake. …feels cheated and overcharged . Client is told of loan processing/application fee at disbursement stage. 6 …finds that collateral based loans result in low loan uptake …concludes that FI can take their assets willy-nilly Client signs loan agreement without the FI explaining collateral in simple language

  6. Client Voices: Regardless of education levels, understanding of loan terms is low.

  7. Lack of understanding leaves some customers feeling cheated. Were you surprised by something related to the loan after taking it? (all current and former clients)

  8. “Empty wallet -- to signify monthly expenditures, the increase of dollar rate…”- Male, Georgia

  9. Lack of information about insurance is worrying

  10. Better disclosure practices make business sense

  11. CPP #3: Adequate Standards of Care Policy and documented process are in place to require transparency on product terms, conditions and pricing. ✔Provides client all key facts document ✔ Loan Contracts includes key information credit process /client rights. ✔ Clients informed of Savings process , terms and conditions ✔ Insured clients given information at time of enrollment ✔ Client education on products ✔ Information provided on payment transaction ✔ Fees charged by 3rd party disclosed to clients.

  12. CPP #3: Adequate Standards of Care ✔ Documented communication process ✔ Adequate time to review contracts ✔ Signed copy of contract - loan, payments ✔ Detailed certificate of insurance coverage ✔ Renewal - client notified. ✔ Credit and Savings – oral and written . ✔ Regular/ On demand information on account balances – accurate and clear. The FI communicates with clients at an appropriate time and through appropriate channels.

  13. CPP #3: Adequate Standards of Care ✔ Disclose pricing publicly - Branch/Agent ✔ Consistent marketing material ✔ Participate in transprency initiatives , if any ✔ Staff trained to explain and verify client understanding. ✔ Use local language – oral and written. ✔ Internal control to verify policies /process The FI takes adequate steps to ensure client understanding and support client decision making

  14. Good practice: Make communication meaningful to the client. • Don’t use fine print. Can you read the bottom of this slide? • Use plain language. Which statement is more meaningful? • A. Non-repayment will result in action on the part of the institution at the immediate outset of the delinquency. • B. The institution will begin the loan collection procedures on the first day the client is late. • Fit the communication method to the client. Are your documents written in the local language? How would a blind person access your important contractual information? Fine print is often overlooked by clients. Minimize the use of fine print.

  15. Good practice: Confirm client understanding. • Use: • Call backs • Check lists • “Key facts” or FAQ document • Glossaries for key terms • Analysis of common complaints/questions to improve communication

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  17. Tools available from the Smart Campaign

  18. Tools available from the Smart Campaign