MicroFinance Transparency to Hold Workshop in Kenya, First Transparent Pricing Initiative in Africa
LANCASTER, PA, USA & NAIROBI, KENYA, October 6, 2009 – MicroFinance Transparency (MFTransparency) will host a training workshop in Nairobi at the InterContinental Hotel on the 19th of October, 2009 in conjunction with the 2009 AMT Microfinance Investor’s Fair. The workshop will train industry professionals on issues related to pricing transparency and consumer protection and will mark the launch of MFTransparency’s Transparent Pricing Initiative in Kenya.
The timing of the initiative was determined by MFTransparency’s invitation to speak at African Microfinance Transparency’s 2009 Investor’s Fair. A meeting of African rated microfinance institutions and resource/funding providers, this annual event provides an excellent opportunity for MFTransparency to conduct its transparent pricing initiative for the first time in Africa. MFTransparency has been coordinating closely with other AMT conference workshops, including ADA/AMT’s Rating Awareness Raising meeting and the Social Performance Task Force workshop which will directly precede the MFTransparency seminar on October 19th. MFTransparency is proud to join these organizations in a day of industry-building initiatives.
MFTransparency Vice-President Alexandra Fiorillo commented on the event, “We are very appreciative to AMT for inviting us to speak at the Investor’s Fair and to add our Transparent Pricing Initiative workshop to the week’s exciting microfinance activities. We look forward to the opportunity to implement our Transparent Pricing Initiative in Kenya’s dynamic and robust microfinance market and expect Kenya will proudly lead the way for pricing transparency in Africa. A successful implementation of pricing transparency in Kenya will help pave the way for other African microfinance markets to demonstrate their commitment to consumer protection.”
During MFTransparency’s Transparent Pricing Initiative, the group will collect data on interest and fees charged on each microfinance loan product in Kenya in order to calculate the accurate, true price (Effective Interest Rate) on those loans. MFTransparency will then post that data for the public to see and learn from on its website (www.mftransparency.org).
The need for an initiative in transparent pricing has arisen in recent years as microfinance drew negative press attention for allegedly excessive interest rates and the use of confusing product pricing. MFTransparency has pointed out, “For example, a quoted interest rate of 3% per month can result in an APR between 36% and 96% and beyond”  MFTransparency hopes to establish an industry standard for cost calculation that will allow for easier product comparison.
The microfinance industry in Kenya is relatively mature, with over US $500 million in loans. The industry comprises almost one million active borrowers and more than four times as many savers. Thousands of organizations, including NGOs, non-bank financial institutions, Savings and Credit Cooperative Societies (SACCOs) and commercial banks, actively administer microfinance services in Kenya . With so much diversity and so many people impacted, there is a great need for a unified effort toward transparency in the Kenyan microfinance industry. MFTransparency seeks to lead this effort, beginning with its October 19th transparent pricing workshop.
MicoFinance 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 previously been active in Bosnia, Peru, Cambodia and Bangladesh. For more information please visit (www.mftransparency.org). Grameen Bank’s Dr. Mohammad Yunus and Elizabeth Littlefield, CEO of CGAP, as well as more than 200 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.
About the AMT Investor’s Fair
The recent evolution of microfinance highlights the growing importance of available transparent information regarding the financial performance of MFIs. Growth opportunities for these institutions are closely linked to their ability to mobilize resources, especially among private investors. Access to these commercial-related funds is generally linked to the availability of up-to-date and transparent financial information. The 2009 microfinance investor’s fair will facilitate this access by bringing together rated MFIs and social investors active in microfinance. For more information please see www.amt-forum.org
For questions relating to this press release please contact:
1 – Microfinance Transparency. “The Need for Transparent Product Pricing.” 2009.
2 – The Microfinance Information Exchange, Inc. (www.themix.org)
The Transparent Pricing Initiative in Kenya is sponsored by MicroNed