New initiative to control microfinance interest rates launched

A new initiative that will protect microfinace clients against exorbitant interest rates has been launched. The initiative is a joint venture between the Association of Micro Finance Institutions of Uganda and Microfinance Transparency International. According to Ms Alexandra Fiorillo the Microfinance Transparency, vice president, the initiative will provide training on transparent pricing to different industry stakeholders including microfinance institutions, regulators and funders.

The move aims to strike a balance between borrowers and money lenders to avoid cheating customers, a practice that has killed the micro finance business.
“Our shared focus on consumer education and transparency will ensure a deep and lasting impact on initiatives that are aimed at improving the financial sector, ” Ms Fiorillo said.

Microfinance Transparent is a global initiative responsible for transparent pricing of interest rates in the microfinance industry. It collects data on interest and fees charged by different microfinances especially on loan product and fees charged on withdrawals and deposits.