Rural bankers embrace more transparent services
Last month, the Rural Bankers Association of the Philippines (RBAP) and MFTransparency, a global network advocating transparency among microfinance institutions, and the Microfinance Council of the Philippines held the Transparent Pricing Initiative forum to promote primarily responsibility among financial institutions in providing information to their clients.
Click here to read the Manila Times article
Rural bankers embrace more transparent servicesRural bankers embrace more transparent services MAKING the pricing of bank products transparent has lately been a hot topic among bankers in line with the global trend towards accountability in the aftermath of a financial turmoil that brought down even the world’s banking giants. It is widely held that the debacle was caused by fraud and greed and the lack of transparency among these dominant financial institutions.
Last March, the Rural Bankers Association of the Philippines (RBAP) and MFTransparency, a global network advocating transparency among microfinance institutions, and the Microfinance Council of the Philippines held the Transparent Pricing Initiative forum to promote primarily responsibility among financial institutions in providing information to their clients. Gladly, participants in the timely event embraced the need for more openness in providing accurate information to depositors primarily on interest rates applied on loans.
Emerging economies such as the Philippines are in the process of strengthening institutions and processes to allow equitable economic growth that would include most of the population and this requires the adoption of social principles such as ethical practices in business. The need for transparency in pricing was, for instance, the basis for a requirement for banks to post the “Truth In Lending Act” in their premises as a guide for the need on accuracy, transparency, and fairness in the provision of financial services.
The rural bank industry, which has been the leader among the Philippine banking sector to expand microfinance services, takes great care to assure consumer protection and the new drive to support transparent pricing is part of this commitment. Following the series of nationwide workshops, MFTransparency will collect pricing data from all major microfinance banks, rural banks, NGOs, and credit cooperatives that will be published with descriptive and contextual information to illustrate the dynamics of microfinance pricing in the local market.
From these data, MFTransparency will also develop educational and training materials for specific audiences including consumers of microfinance products and the management and staff of rural banks and other microfinance institutions. MFTransparency, based in the United States, had organized transparent pricing efforts in India, Cambodia, Bangladesh, Azerbaijan, Bosnia, Kenya, Malawi, Uganda, Rwanda, South Africa, Ghana, Senegal, Burkina Faso, Togo, Benin, Mali, Niger, Bolivia, Ecuador, Argentina, Colombia and Peru.
RBAP, the Microfinance Council of the Philippines, Grameen Bank’s Dr. Muhammad Yunus, Elizabeth Littlefield, former CEO of Consultative Group to Assist the Poor (CGAP) and more than 700 industry professionals and organizations have committed to transparent pricing by endorsing MFTransparency and its initiative. The issue of pricing is seen as symbolic of the rural banking industry’s commitment to provide financial services to the less economically endowed majority of the population and who would benefit the most from accurate information.
During the Manila MFTransparency workshop, RBAP President Cora Miller summed up the proactive approach of the sector by sharing that “by demonstrating our seriousness in tackling these issues, we show to the world that the Philippine microfinance industry is at the forefront of change and remains among the best!”