Industry Transparency
MFTransparency will be the venue for the microfinance industry to publicly demonstrate its commitment to transparency, integrity and poverty alleviation. Our ultimate goal is to provide essential information necessary for healthy free market conditions.
Product Pricing Standards
MFTransparency will enable transparent communication between suppliers and consumers of microcredit products, as well as all microfinance stakeholders, by presenting information on credit products and their prices in a clear and consistent fashion.
In many countries, banking institutions are required to state true product pricing using standards such as the APR (Annual Percentage Rate). Such laws were enacted to help consumers make informed decisions regarding seemingly comparable loans, when in actuality one loan is significantly more expensive. We believe that the same principles of transparent pricing applied within the commercial finance industry should also apply to the microfinance industry.
Objective and Verifiable Information
MFTransparency's paramount value is, indeed, transparency. All operational rules, calculations, and data sources are made public. MFTransparency also operates on the principle of reporting solely objective and verifiable information. The website simply discloses the repayment schedules for each product that MFIs offer and calculates the prices of those products in APR terms. MFTransparency strives to be an organization supported and respected by the vast majority of practitioners in the microfinance industry and believes that staying true to these principles will earn us that respect.
Educating Stakeholders
In addition to reporting pricing data, MFTransparency will undertake the equally important role of developing and disseminating straightforward educational material to enable all microfinance stakeholders to better understand the concept and function of interest rates and product pricing.
Detailed Data Collection
All APR pricing calculations will come directly from
actual repayment schedules for each product
offered by the MFIs. The goal is that all repayment
schedules be provided directly from the MFI in
order to confirm accuracy of the information and
minimize complications and misunderstandings
that can occur when communication passes
through multiple channels. MFTransparency will
ask for supplemental basic product information as
well, but this information is not essential to the APR
calculation. Collecting all repayment schedules from
every MFI in the world requires a systematic, semi-
automated, and accurate approach and that will be
one of MFTransparency's principle goals. The chart
below is an example of the detailed data that
will be available at www.mftransparency.org.
