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The Need for Transparency

Published on March 22, 2012

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Languages available: English Spanish French Portuguese

Microfinance has long been a highly transparent industry, and rightly proud of it. But sadly, the true price of our loan products has rarely been accurately measured or reported. The next stage in the growth of microfinance will require a new level of understanding and openness about the costs of lending in small units and transparent communication of the prices charged to cover those costs. An industry born to displace the moneylenders by providing low-cost credit to the working poor needs to ensure that its clients have clear information about the cost of the money they borrow.

Shouldn’t the same principles of transparent pricing applied within the commercial finance industry also apply to the microfinance industry?

This short two page document gives a brief outline of:

  • Why the microfinance industry needs standards for disclosure
  • How non-transparent pricing in microfinance has evolved and spread
  • The process for implementing pricing transparency

We believe that an industry-wide effort to practice transparent pricing is essential to the long-term survival, growth and effectiveness of the microfinance industry.

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