Media Stories

• e-MFP

  Implementing Pricing Transparency in Microfinance

  Microfinance has long been a highly transparent industry, and rightly proud of it. We share a wide variety of financial indicators about our MFIs. Unfortunately, the true price of microfinance loan products has never been accurately measured nor reported. For an industry born to “displace the moneylenders” by providing low-cost credit to the working poor, this is hard to imagine and even harder to explain. In addition, non-transparent pricing is a serious market imperfection that impedes efficiency, sound management decisions, and healthy consumer choice. Original Story: e-MFP Newsletter, page 3 (2009-04-20) Link >>

• Micro Capital

  MICROCAPITAL PAPER WRAP-UP: The State of the Microcredit Summit Campaign Report 2009

  THE NEED FOR PRICING TRANSPARENCY IN MICROFINANCE Chuck Waterfield, founder of Microfinance Transparency, writes that the true price of microfinance loan products has never been accurately measured nor reported. Microfinance loans, contrary to commercial loans, can quote an interest rate of three percent a month which results in an APR between 36 percent and 96 percent, depending on how this rate is applied. The same principles of transparent pricing applied within the commercial finance industry have not been applied to the microfinance industry. There has been intensive dialogue on this issue, and initiatives have been created in order to address non-transparent pricing, including the “Campaign for Client Protection” which began in April 2008, and another is MicroFinance Transparency. (2009-02-03) Link >>

• Microcredit Summit Campaign

  State of the Campaign Report

  The 2009 State of the Campaign Report contains an article on Pricing Transparency written by MFTransparency. See p. 15 of the report. The link gives access to a website where the entire report can be dowloaded in English, Spanish, and French. (2009-01-28) Link >>

• Malawi Daily Times

  Global body appeals for microfinance openness

  A 2009 report issued by Microcredit Summit based in Washington, US, says there is need for pricing transparency for microfinance institutions. The report issued on Monday by Microcredit Summit Campaign Director Sam Daley-Harris indicates that although the microfinance sector has globally been transparent, true prices for the sector’s loans and products have never been accurately measured. (2009-01-28) Link >>

• Voice of America

  Small Loans Grow in a Big Way

  As the microfinance industry grows, there are efforts to prevent abuses. .... a new effort based in the United States called MicroFinance Transparency. The aim is to prevent abuses by letting borrowers compare pricing information from different lenders. Its creator, Chuck Waterfield, calls it "an industry-based truth-in-lending effort." Borrowers, he says, are often misled about the true price of a loan. "For twenty years we set the price to cover the cost. Now, some organizations are setting the price to whatever they can get away with," he says. The first step is to publish information collected from eight countries. Chuck Waterfield says information from Peru, Bosnia and Cambodia will appear in February at the Web site mftransparency.org. He says the others, including at least one country from Africa, will follow a few months later. (2008-12-22) Link >>

• Financial Times

  The battle for the soul of microfinance

  The trouble is transparency. Competition works best when customers know what they’re paying and what they’re paying for, which is why lenders in the US have been required for the past 40 years to disclose their interest rates in a standardised format. Few microfinance institutions do the same thing, and the results can be baffling. “You have a borrower comparing two institutions across the street from each other, and she can’t tell which has the cheaper product,” complains Chuck Waterfield, the founder of a non-profit called Microfinance Transparency. “You couldn’t. Nobody could.” (2008-12-06) Link >>

• India Development Blog

  Is Transparent Pricing in Microfinance Necessary

  Does it seem like the obvious response to this question should be a “Yes!”? An interesting point made by Sanjay Sinha (M-CRIL), at one of the Conference sessions, was how communication would play a key role in ensuring that increased transparency would not backfire on the MFIs. (2008-11-13) Link >>

• Oikocredit

  First MFTransparency’s endorsement in the Netherlands

  On 4 October Oikocredit endorsed, as first Dutch-based organization, MicroFinance Transparency and announced a donation of € 20,000 in this initiative. MFTransparency’s mission is to be the venue for the microfinance industry to publicly demonstrate its commitment to pricing transparency, integrity and poverty alleviation. (2008-10-16) Link >>

• Grameen Foundation

  GF Joins Call to Safeguard Microfinance Clients

  Grameen Foundation joined 46 other organizations to support the launch of Microfinance Transparency at the Asia-Pacific Microcredit Summit, held in Bali, Indonesia, July 27-29. In a speech that became a keystone of the conference, Grameen Foundation board member Muhammad Yunus called for greater transparency by microfinance institutions, challenging lenders to publicly report interest rates and to set them no higher than that which will cover costs. (2008-09-01) Link >>

• Gulf Weekly

  Potential at bottom of pyramid

  In an effort to head off a potential crisis in the fast-expanding micro-finance industry, its leaders are adopting global truth-in-lending standards and creating a system for comparing loan terms offered by competing lenders. To manage the effort, a new self-monitoring organisation, Micro-finance Transparency, is being set up as the industry's policeman. The goal is to prevent companies from taking advantage of poor people with high interest rates and misleading credit offers. The initiative was announced at a micro-credit conference in Bali by Chuck Waterfield, a professor at Columbia University who spearheaded the initiative and Yunus, who launched the micro-credit revolution in Bangladesh 30 years ago with his Grameen Bank. (2008-08-27) Link >>

• Unitus

  Balancing Growth and Mission at the Microcredit Campaign Summit

  An important area of interest for Unitus is increased financial transparency for MFIs and the clients they serve. During the opening plenary, Dr. Yunus and Chuck Waterfield of Microfin announced the launch of MFTransparency, an initiative that aims to bring truth-in-lending standards to microfinance by publishing standardized annual interest rates on its website. Unitus and nearly 45 other microfinance-related organizations endorsed the initiative as a critical next step in ensuring ethical lending practices. (2008-08-14) Link >>

• Hope International

  HOPE International endorses Microfinance Transparency

  Lancaster, PA (August 4, 2008) HOPE International has announced its endorsement of MFTransparency.org, a new nonprofit organization created to encourage transparency, integrity, and poverty alleviation within the microfinance sector. HOPE was the first microfinance network to register its support for this new initiative that will prevent abuse of the microfinance sector and exploitation of the poor. (2008-08-04) Link >>

• Lancaster Newspapers

  Local man unveils microfinance dream

  Muhammad Yunus of Pakistan pioneered a microfinance system that has provided small loans to more than 100 million people living in poverty. Chuck Waterfield of Lancaster is an internationally known microfinance expert who is determined to foster Yunus' dream in growing nonprofit, humanitarian banking. (2008-08-01) Link >>

• MicroCapital

  Nobel Laureate Muhammad Yunus Speaks Out Against For-Profit Microfinance from Asia-Pacific Microcred

  (2008-08-01) Link >>

• Yahoo Singapore

  Setting Standards for Microfinance

  (2008-07-29) Link >>

• Vancouver Sun

  Micro-financiers track loan costs in developing world

  Annual interest of 25, 50 or maybe 100-plus per cent: What's fair? Where, exactly, should the line be drawn between loan-sharks and worthy micro-credit programs? Between enterprises that exploit poor people who can't get conventional loans and those that help them? There's no short answer. (2008-07-29) Link >>

• Payday Pundit

  Truth in lending for microfinancers?

  Stung by allegations of charging high interest rates, Microfinancers are considering a "truth-in-lending" type standard to apply across the industry. (2008-07-29) Link >>

• Reuters, India

  Microcredit lenders urged to improve transparency

  JAKARTA, July 28 (Reuters) - Lenders to the world's poor should disclose how much they charge their borrowers, a global network of microcredit agencies said on Monday, urging more transparency and greater protection of the poor. The proposal is backed by Nobel Peace Prize winner Muhammad Yunus, who set up Bangladesh's Grameen Bank and is regarded as the founder of the microcredit movement. (2008-07-28) Link >>

• TheStreet.com

  Microfinance Experts Criticize Mexican Bank

  During a conference call Monday from the Asia-Pacific Microcredit Summit, several advocates chastised those who charge "loan-shark" interest rates and criticized Compartamos' initial public offering last year. Microlending should be performed by banks and nonprofits that operate within the country, they say, and better oversight is needed to ensure competitive rates and ethical collection practices. (2008-07-28) Link >>

• BusinessWeek

  Setting Standards for Microfinance

  In an effort to head off a potential crisis in the fast-expanding microfinance industry, its leaders are adopting global truth-in-lending standards and creating a system for comparing loan terms offered by competing lenders. To manage the effort, a new self-monitoring organization, MicroFinance Transparency, is being set up as the industry's policeman. The goal is to prevent companies from taking advantage of poor people with high interest rates and misleading credit offers. The initiative was announced on July 28 at a microcredit conference in Bali by Chuck Waterfield, a professor at Columbia University who spearheaded the initiative, and Nobel Peace Prize winner Muhammad Yunus, who launched the microcredit revolution in Bangladesh 30 years ago with his Grameen Bank. (2008-07-28) Link >>

• CNBC

  Muhammad Yunus Joins Launch of Project to Help the World’s Poorest Borrowers Avoid High Interest Rat

  Nobel Peace Prize Laureate Muhammad Yunus joined in announcing the launch of MicroFinance Transparency, a non-governmental organization designed to make public the interest rates charged by microcredit lenders around the world, offering a much-needed form of consumer protection to the worlds poorest borrowers. (2008-07-28) Link >>

• Forbes

  Yunus' Bank Shot

  Muhammad Yunus, lender to the very poor and winner of the 2006 Nobel Peace Prize, thinks traditional bankers could learn from his business model. Consider: for all their fee income and credit analysis, they're the ones having the financial crisis. (2008-07-28) Link >>

• Smart Money

  Muhammad Yunus Joins Launch of Project to Help the World's Poorest Borrowers Avoid High Interest Rat

  NUSA DUA, Indonesia, July 28 /PRNewswire-USNewswire/ -- Nobel Peace Prize Laureate Muhammad Yunus joined in announcing the launch of MicroFinance Transparency, a non-governmental organization designed to make public the interest rates charged by microcredit lenders around the world, offering a much-needed form of consumer protection to the world's poorest borrowers. Professor Yunus joined in introducing the US-based, independent NGO here at the annual gathering of the Microcredit Summit Campaign, a Washington, DC-based network of more than 3,600 of the world's leading institutions providing tiny loans to 133 million poor clients, mostly in developing nations. Also attending the conference were Indonesian President Susilo Bambang Yudhoyono, Honduran President Manuel Zalaya Rosales, South African First Lady Mrs. Zanele Mbecki, and former Peruvian President Alejandro Toledo. (2008-07-28) Link >>

• Lancaster Newspapers

  He's aiding borrowers in developing nations

  In the United States, the cost of borrowing money is stated clearly and consistently, thanks to federal law. The Truth in Lending Act requires lenders to tell customers the annual percentage rate they would pay, so customers can easily shop for the best deal. But in developing countries, it's truly a different world. Customers, especially poor business people taking out tiny loans from microfinance lenders, often have a hard time learning the real rate they're paying. (2008-07-25) Link >>