A Conversation with Paul Arias, CEO of CREDIFE
MFTransparency and its strategic implementation partner, Red Financiera Rural (RFR) launched the Transparent Pricing Initiative in Ecuador in April this year, with transparency workshops in Quito, Ambato and Guayaquil. The Ecuador Initiative is sponsored by the Ford Foundation to promote responsible and transparent pricing in the microfinance industry in Latin America.
MFTransparency spoke with Paul Arias Guevara, CEO of CREDIFE, about the current situation with regard to pricing transparency in Ecuador, the benefits of MFTransparency’s Initiative, as well as the challenge of encouraging the majority of the local microfinance market to participate in this initiative. CREDIFE is a member of RFR and is the largest MFI in terms of scale in Ecuador, with a total loan portfolio of US$ 282,983,033 and 87,335 active loan clients.
MFTransparency: You have signed MFTransparency’s endorsement statement and support this initiative. Has your institution already submitted pricing data to the Ecuador Initiative?
Paul Arias: We have submitted all the required data.
MFTransparency: What is your assessment of the current situation regarding pricing transparency in the microfinance industry in Ecuador?
Paul Arias: I think there is a long way to go, and pricing transparency coupled with sustainability will certainly further promote responsible management among all stakeholders of the microfinance industry.
MFTransparency: What, in your opinion, is the greatest benefit of this Initiative, both for your institution and for the Ecuadorian microfinance industry as a whole?
Paul Arias: The greatest benefit would be helping eliminate asymmetry of information in the benefit of clients.
MFTransparency: Which challenges do you foresee for the Transparent Pricing Initiative in Ecuador? What are the reasons and how can these challenges be overcome?
Paul Arias: The recognition that competition and product offerings to people must be based on clarity, accuracy and long term growth prospects for both institutions and clients.
MFTransparency: What would be your advice to MFTransparency in order for it to succeed in its efforts in Ecuador?
Paul Arias: I would suggest establishing and consolidating standard measurement techniques allowing for efficient long-term monitoring.
MFTransparency: How would you suggest we convince the majority of the industry to get involved in this Initiative?
Paul Arias: Through training and the provision of examples of similar experiences in other markets which have been successful.
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