Transparent Pricing Training in the Hague, Netherlands

MFTransparency will be in attendance at the Microfinance Responsible Finance Forum to be held in The Hague, Netherlands, on January 27.  For those planning to attend, we look forward to seeing you there.

We will also host a half-day training seminar the next morning, on Friday, January 28. MFTransparency President & CEO Chuck Waterfield will give the training. This training is open to all who are interested, although maximum enrollment is 25 and priority will be given to attendees of the Microfinance Responsible Finance Forum. There is no fee for the training.  Rather, this is part of MFTransparency’s mission to advance understanding of transparent pricing in microfinance.   The description below outlines what we will cover.  We’ll be spending a large amount of the time on understanding how to calculate Annual Percentage Rates and Effective Interest Rates, using a software tool we have developed by MFTransparency.

If you are able to attend, please write to [email protected] for additional information about time and location.  Also, please do share this announcement with others you know who will be attending the Forum event.

Transparent Pricing

Commercial financial markets often have regulations on transparent pricing, or truth-in-lending, but this is a rarity in microfinance.  Determining the true price of microfinance products is very rarely done and generally yields quite surprising results – True rates are often two to three times higher than quoted rates.  With such a significant lack of transparency, there is no known “market price”. This means consumers cannot make informed decisions, managers have trouble setting the price of their products, and investors often don’t know the price of the products they are indirectly funding until they see the rates show up in the headlines of a journalist headline article. This course will describe how the global microfinance industry is correcting this market imperfection to help promote responsible behavior within the industry.

Key points include:

• How and why has transparent pricing emerged over the past 40 years in developed countries? What benefits does transparency offer?

• The reasons why microfinance has been trapped into practicing non-transparent pricing

• Understanding the implications that non-transparency is having on the reputation of the industry as well as on individual institutions

• Understanding the mechanics of calculating Annual Percentage Rates, Effective Interest Rates, and knowing the difference between the two

• Investigating alternative methods for transparent pricing and means for helping clients make better informed decisions

• Understanding the current efforts underway to quickly shift the global microfinance industry to pricing transparency