Introduction to Transparent Pricing in Microfinance
Microfinance, originally a donor‐funded innovation of the non‐profit world, now more often makes headlines for its movement towards commercialization. As discussions about profit and social responsibility heat up, the importance of pricing transparency is increasingly apparent. Microfinance has long been a highly transparent industry, but unfortunately the true prices of microloan products have rarely been accurately measured or reported, and remain widely misunderstood.
In its next phase of development, improvements in interest rate disclosure and the standardization and communication of prices will be essential to the functioning of a healthy, sustainable microfinance industry.
This four-page briefing outlines:
- The evolution of non-transparent pricing
- The dynamics underlying pricing in microfinance
- The movement for transparency