Launch of Transparent Pricing Data for the Indian Microfinance Market
LANCASTER, PA USA & NEW DELHI, INDIA February 2, 2011 – For the first time in history, true-cost microloan product pricing data for the Indian microfinance market is now publicly available. MicroFinance Transparency has completed an analysis of microloan pricing in India and shares the results on its website. MFTransparency will present analysis of the data as well as other findings of the Transparent Pricing Initiative in India at an industry conference in Mumbai on February 25, to be followed by an internal conference held by MFTransparency, the Reserve Bank of India (RBI) and the College of Agricultural Banking (CAB) in Pune on February 28.
Chuck Waterfield, CEO of MFTransparency, says of the launch “We would like to congratulate the 82 participating microfinance institutions for this show of commitment to transparent pricing. The microfinance industry in India recognized the importance of transparent pricing and asked our assistance in early 2010. It has been inspiring for our team to work alongside them and facilitate this process.” Data submissions on the part of these institutions account for approximately 80% of the estimated total Indian market measured by gross loan portfolio and 77% of active borrowers. Comprehensive analysis of this dataset, as well as explanations of the calculations used and their relevance in the Indian microfinance market are available in the India Pricing Data Report.
Key findings of the Pricing Data Report include analysis of pricing by institution type, loan purpose and the relative importance of different fee types, insurance charges and compulsory savings requirements. The report also delves into the predominance of different product characteristics such as loan purpose, lending methodology and target demographics by gender and urban/rural focus. An in-depth section on costing compares dynamics of the Indian market as a whole with those of some of the most advanced microfinance markets internationally, including Bolivia, Bangladesh and Mexico. Featuring graphs from the online dataset, this analytical report highlights the most valuable insights from the Transparent Pricing Initiative in India.
One of the central aims of this data launch is to engage all stakeholders in industry-wide discussion. “It is our hope that this data will serve as a new foundation of information on which the microfinance industry can build transparent pricing practices,” states MFTransparency Vice President Alexandra Fiorillo. “We look forward to working with all who undertake this cause, both within the Indian market and the international microfinance industry.”
The Transparent Pricing Initiative in India was launched in April 2010 and the majority of the data collection process was completed by September, thanks in part to the efforts made by the Microfinance Institutions Network (MFIN) to involve their membership in the process. The success of this project reflects the longtime commitment of the Indian microfinance industry to transparent pricing and client protection.
MFTransparency would like to thank the sponsors of the Transparent Pricing Initiative in India, Citi Foundation, the Michael & Susan Dell Foundation, the Microfinance Institutions Network (MFIN), and recognize Standard Chartered Bank for their role as lead donor and their commitment to the project in its earliest stages. We would also like to thank ACCESS Development Services, our implementation partner, without whom the logistics of the project would not have been possible. We are grateful for the support that the RBI and CAB have shown throughout the Initiative, making it truly inclusive of all components of the Indian microfinance market.
The publication of this data is a major step forward in the Indian microfinance industry’s ongoing efforts towards greater transparency and consumer protection. We hope to see the Transparent Pricing Initiative in India serve as a catalyst for further developments in responsible microfinance, both in India and in microfinance markets around the world.
MicroFinance Transparency is an international non-governmental organization founded in 2008 with the purpose of facilitating transparent markets through the dissemination of true cost information to all market stakeholders. MFTransparency represents an industry movement toward fair practices and responsibility. Based in the United States, the group has organized transparent pricing efforts in Bosnia, Peru, Cambodia, Azerbaijan, Kenya, Bangladesh, Ecuador, Bolivia, Argentina, Colombia, India, Burkina Faso, Senegal, Togo, Benin, Malawi, Uganda and Rwanda. For more information please visit www.mftransparency.org. Grameen Bank’s Dr. Mohammad Yunus and Elizabeth Littlefield, former CEO of CGAP, as well as nearly 700 industry professionals and organizations have committed to transparent pricing by endorsing MFTransparency and its initiative. For information on MFTransparency staff, please see Who We Are.
For questions relating to this press release please contact:
Development & Communications Associate