Bienvenue

1
Consumer Protection Developing Standards Magdy
Moussa Middle East Regional Director PlaNet
Finance
Tunisia May 2008
2
This workshop will comprehend

• General introduction presentation, by Magdy
  Moussa (PlaNet Finance)
• Definition
• What do clients need to be protected from?
• Why should this issue be addressed now?
• What is happening today in client protection, by
  Maria Perdomo (Freedom From Hunger)
• Perspectives on Consumer Protection issues
• Best practices in Bolivia
• The different models of Client Protection
• Emerging standards of good practices in Consumer
  Protection, by Lilian Diaz (SEEP Network)

3
What is Client Protection?

• CGAPs definition
• Consumer Protection encompasses all the means
  necessary to
• Safeguard the interests of consumers (in the
  case of microcredit, usually poor borrowers in
  developing countries)
• Empower them to know their rights and make wise
  and educated decisions.

4
Protection from WHAT?

• From abuses by MFIs
• Lack of transparency
• Imbalance of power between lenders and borrowers
• Functionally illiterate Individuals and
  insufficiently informed clients pressured into
  poor borrowing decisions
• MFIs who do not pro-actively educate their
  clients
• Many more abuses that the other moderators will
  talk about
• Limited ability to select the best fitting
  service provider
• Harming themselves by over-indebtedness from more
  than one MFI
• Financial Institutions offering consumption loans
  to Micro and Small Enterprises, not adapted to
  needs (by private sector, in absence of credit
  bureau)

5
Why now?

• Microfinance industry is moving towards financial
  deepening
• Increased commercialization and competition
• Access to financial services to more and more
  people
• MF services as an integral service within FFI
• More and more, lenders less concerned with
  socially responsible lending principles
• Entrance on MF market of non bank private sector
• Non conventional modes of lending
• Companies allowed to engage in MF through
  Mourâbaha and Moushâraka

6
Thank you for your attention