Launch of the Transparent Pricing Initiative in Colombia
Greetings from Colombia! This week MFTransparency is launching the Transparent Pricing Initiative in Colombia, hosting two transparency workshops in Bogotá and Medellín.
Over seventy representatives of the local microfinance community attended today’s workshop in Bogotá, discussing costing and pricing in the context of the local microfinance sector. Jaime Villarraga and Claudio Higuera of Microfinanzas para el Desarrollo and EMPRENDER-AsoMicrofinanzas respectively, MFTransparency’s strategic implementation partners in this Initiative, as well as Carlos Moya of Banca de las Oportunidades, inaugurated the workshop highlighting the timeliness and importance of launching the Initiative in Colombia.
In his opening speech, Jaime Villarraga explained how the Transparent Pricing Initiative in Colombia, promoted and funded by Ford Foundation, perfectly fits into the current industry movement towards more transparency in microfinance and discussion about a revision of the existing interest rates regulation. The Colombian government is currently revising the law on interest caps and there is some optimism that the current cap may be raised or eliminated. An important concern, however, is the market behavior that may result from a change in the regulation that has existed for decades. Microfinanzas para el Desarrollo therefore believes MFTransparency’s Transparent Pricing Initiative may strengthen the commitment of the microfinance industry towards consumer protection and pricing transparency, promoting competition and preventing the emergence of artificially high prices in a free market environment. Claudio Higuera presented the latest market data collected by EMPRENDER, showing the significance of the local sector in quantitative terms and emphasizing the qualitative importance of committing to transparency. Carlos Moya highlighted the strategic importance of auto-regulation through MFTransparency so as to demonstrate responsible free-market behavior and make the case for a revision of the interest cap regulation.
I’m excited to share the first insights on the regulatory environment and transparency issues in my next blog post. Interest regulation and pricing strategies are extremely interesting in Colombia. Earlier this week we had informative meetings with representatives of the Colombian Superintendency, Microfinanzas para el Desarrollo, EMPRENDER-AsoMicrofinanzas, the Ministry of Finance, Banco de las Oportunidades, and Acción Social, and we are currently compiling relevant regulatory documents and more detailed information from key stakeholders, which I will highlight next time.
Tonight Chuck Waterfield, CEO & President of MFTransparency, my colleague Andres Hammer and I will travel to Medellín and host our second transparency workshop tomorrow. Andres will soon give an update on our launch in Medellín. Next week I’ll be traveling to Bolivia to assist the last few MFIs with the completion of their data submission and meet our local partners with whom we are co-developing educational materials for the local market. Stay tuned for more news from the trip!