MFTransparency Presents Initial Results of the Transparent Pricing Initiative at the Microfinance Congress in Colombia
MFTransparency recently took part in the “Segundo Congreso de la Industria de las Microfinanzas en Colombia”, organized by Asomicrofinanzas, the national association of MFIs, held in the coastal city of Santa Marta on the 31st of March and 1st of April 2011. This industry-wide event provided a platform for us to present the preliminary results of our Transparent Pricing Initiative in Colombia, sponsored by the Ford Foundation.
The conference gathered around 200 participants from all over Colombia and a number of other countries in the region. It was hosted by the Governor of the Magdalena Region, Juan Pablo Díaz Granados, the Superintendent of the Solidarity Economy, Enrique Jesús Valderrama as well as the President of the Managing Council of Asomicrofinanzas, Gregorio Mejía.
The Santa Marta Congress provided an excellent setting for the launch of MFTransparency’s preliminary results, where President and CEO Chuck Waterfield took the opportunity to stress the importance of moving forward in the area of pricing transparency in Colombia. Other brave steps toward responsible practice currently being undertaken were demonstrated at the Congress. These include an ethical agreement presented by Gregorio Mejía and signed by the various representatives of the sector present, as well as an enthusiastic response to the Universal Code of Corporate Governance for Microfinance Institutions presented by the President of Fundación Microfinanzas of the Spanish bank BBVA, Manuel Méndez del Rio Piovich.
Mr. Waterfield elaborated on the different ways that the microloan pricing data collected by MFTransparency allows for a deeper understanding of the true costs paid by borrowers, supporting the pricing disclosure mechanisms enforced by Colombian legislation. He also took the opportunity to present our preliminary data, showing the structure of the price curve in Colombia (the relationship between price and loan size), comparing it with other countries in the region and examining how it is affected by current interest rate caps imposed by national regulators.
We arrived at Santa Marta having received data from 24 financial institutions, including Commercial Banks, financial cooperatives, credit and savings cooperatives, foundations, NGOs and state-sponsored programs. As a result of our participation in the Congress, this number continues to grow. Several new MFI participants have joined in the last couple of weeks, including WWB, who’s example we trust will be followed by the few remaining leading institutions yet to submit data.
We are now in the final stages of data collection and updating and hope that our initiative will cover close to 100% of the estimated national market by the time of the official launch, provisionally scheduled for May 2011. Check back for updates.