African Policymakers Map the Way Forward
Last Week, MFTransparency hosted the second African Microfinance Pricing Transparency Leadership Forum in Nairobi, Kenya from June 18th – 19th 2013. The event was organized with support from our operational partner Planet Rating and under the sponsorship of the Agence Française de Développement (AFD).
Unlike the first African Microfinance Pricing Transparency Leadership Forum, which took place in October 2011 – also in Nairobi, Kenya – this event was much smaller. The forum gathered around 30 participants, including regulators from 5 African countries as well as industry experts and technical assistance providers from around the world. This leaner set-up provided the participants with a better opportunity to engage in meaningful discussions within smaller groups. Not only was there more dialogue and interactions, but the discussions were much more open. Another small regulators event is planned to take place later on this year to gather the francophone West African regulators and policy makers as well.
The key objectives of the forum this year were the exchange of experiences (peer to peer learning) on new developments in the different countries and the dissemination of knowledge that can be used by the participants to facilitate pricing disclosure in their respective markets. During the opening session, the majority of the participants expressed their wish to learn more on pricing transparency and best practices in pricing regulation to enable them to incorporate pricing transparency in their national microfinance policies and regulations.
Given that the majority of the participants had not attended the first forum, the first day was designed to give an overview of the pricing analysis through theory and training. The participants worked in country groups to review, discuss, and react to the newly disclosed pricing data from their respective markets. The second day of the forum was designed under the theme of policies for improving pricing and stakeholder decision-making. The sessions addressed the means of constraining the lender, specifically focusing on (a) truth-in-lending approaches and (b) cap approaches, as well as the different approaches for communicating pricing transparency to the clients and all other actors in the market.
The group exercises and discussions were perhaps the most interesting activities during the forum due to the sharing of country experiences and new pricing developments on the regulatory front. The last group exercise at the forum was titled Key Takeaways and Moving Forward and was designed to provide the different country groups with an opportunity to share with the rest of the participants some of their key takeaways from the forum through a matrix that can be translated into a road-map for each respective country. Representatives from each country group shared their current situation as well as thoughts on their desired future situation (milestones), the actions needed to realize the milestones, the necessary resources, stakeholders that should be involved, and the overall time-frame required to achieve their desired milestones. One of the most noteworthy takeaways from this exercise was that the majority of the countries present had ongoing activities related to introducing new truth in lending legislation or revising existing legislation.
The overall feedback on the forum was very positive and it indicated that most of the participants will be using the knowledge generated from the forum through the presentations, materials, discussions, and exchanges in their ongoing efforts in introducing or revising transparent pricing legislation in their countries.
Indeed, this forum was a unique gathering given the importance of the issue of pricing transparency and its relevance to the ongoing financial inclusion and client protection themes. Having distinguished representation from amongst regulators and policy makers was key to the success of the event – since they are key stakeholders and play a critical role in introducing and improving pricing disclosure practices in their respective countries. Finally, while they are learning from each other and from global best practices, African countries also continue to be leaders in pricing transparency disclosure and discussions and are setting an example for the rest of the industry to learn from as well.
We would like to extend our appreciation once more to our partner Planet Rating, the event sponsor Agence Française de Développement (AFD), and the event Steering Committee members composed of representatives from MFTransparency, AFD, AFMIN, CGAP and UNCDF. Without their support and vision, we would not have been able to organize such an important event. A special thanks also to the speakers and participants for their valuable contributions which made this forum an interactive platform for exchanges and discussions.