Microfinance TraPS Handbook
The Microfinance Transparent Pricing Supervision (TraPS) Handbook is one of the outputs from the African Regulator Project. Developed jointly by Planet Rating and MFTransparency under the sponsorship of the Agence Française de Développement (AFD), this handbook is a culmination of the learnings and knowledge that came out of from the African Microfinance Pricing Transparency Leadership Forums that were organized in Nairobi, Kenya in 2011 and 2013. While this resource was developed essentially to provide African policy makers with policy recommendations on pricing transparency issues, it can certainly be used by a wide range of industry stakeholders.
The first chapter of this handbook describes various complications of interest, while chapter two details other elements that add to and affect the true price of a loan. Chapter three explains price caps providing information on some of the theoretical approaches to price caps and the impact of price caps on product offering. While the first three chapters of the handbook review the effects of many pricing design options on the true price of a loan, chapter four, the last chapter of the handbook, examines how a true price should be disclosed.