amfiu association of micro finance institutions of uganda the transparency program at amfiu -...
TRANSCRIPT
AMFIU
Association of Micro FinanceInstitutions of Uganda
THE TRANSPARENCY PROGRAM AT AMFIU -
Experiences
Presented at the Peer Learning Event
for EU/ACP Grantees
by Zainabu Asiimwe),
Consumer Affairs Specialist AMFIU
AMFIU
Association of Micro FinanceInstitutions of Uganda
Outline
• Background (2004-2006)• Why AMFIU• Transparency program (since 2007) • Transparency program - Implementation• Role of stakeholders • Challenges• Transparency in Practice• Lessons learned
AMFIU
Association of Micro FinanceInstitutions of Uganda
Background (2004-2006)
Consumer Education Program
…Base line survey showed that:- Low knowledge about financial services- Negative attitude towards financial institutions- Some customers better off saving than taking loans
…Program was to address:- Rights and responsibilities of consumer- Financial services available (informed choice)
…Program was designed as:- Multi-channel, public campaign (Radio, Flip Charts,
posters/fliers, newspaper)
AMFIU
Association of Micro FinanceInstitutions of Uganda
Short term consumer interest
Short term MFI interest
Take small loans that meet immediate needs
Would want to give out big loan amounts
Get free from debt Continue as a credit client and reduce drop outs
Shop around for the institution that responds to the immediate needs
"Lock-in" of customer, e. g. through quick disbursement without thorough appraisal
Lowest total cost of loan Highest returns on services
Why AMFIU?
AMFIU mandate to orient MFIs towards long-term perspective
In the short perspective, client and MFI-interests might be at conflict:
AMFIU
Association of Micro FinanceInstitutions of Uganda
Long term consumer interest Long term MFI interest
Be transparent to avoid over-indebtedness
Be transparent on fees and interest rates to create trust, i. e. long-term relationship
Sustain a relationship of trust with the MFI to maintain easy access to services
Maintain relationship of trust with the client for good portfolio quality
Use different services to meet personal needs in the most effective way
Offer a variety of products
Shop around to be informed about the range of services and their best prices available in the market
Maximize efficiency and productivity in order to retain customers and increase the market share
Why AMFIU?
In the long perspective, client and MFI-interests are compliant:
AMFIU supports its members to invest into long-term position.
AMFIU
Association of Micro FinanceInstitutions of Uganda
Foundation: 1st phase of CEP (2004-2006)
CEP-Launch and Dissemination in 35 districts
MFIs compliant
to CCP
Lobby and advocacyTOT and
Training Manuals forMFIs client trainings
Handbook on CE
Display of fees and interest rates / total cost
Informed ChoicesKnowledge Sharing
Rights and ResponsibilitiesInstitutionalizing of Market drive
Marketing of Performance Monitoring (PMT/PMS)
Transparency program (since 2007)
AMFIU
Association of Micro FinanceInstitutions of Uganda
Program Implementation - Channels
1. Radio programs/spots
They target both MFIs/SACCOs
and consumer.
The themes of the programs are
1. Savings
2. Debt management
3. Consumer code of practice (CCP) for MFIs and SACCOs
4. SACCO formation and management
5. Making choices i.e. amongst institution or products.
AMFIU
Association of Micro FinanceInstitutions of Uganda
2. Trainers of Trainers (TOT)
1. Budgeting ( Use money wisely)2. Savings (You can do it)3. Debt management (Handle with care)4. Bank services ( Know your options)5. Financial Negotiation (Communicate with confidence)
Institutions e.g. DPCs, Straight Talk, UCA CEEWA Uganda,
MSC Ltd
Clients
TOT Manual
MFIs
This TOT channel recognize that Consumer financial education is a win-win investment for both providers and consumers.
Program Implementation - Channels
AMFIU
Association of Micro FinanceInstitutions of Uganda3. Music dance and drama
Music dance and drama addresses the following themes and these are presented in local languages as well as English. The target for the show are both consumers as well as MFIs.
1. Savings
2. Debt management
3. Government programs and how to access them
4. How a SACCO is managed
Program Implementation - Channels
AMFIU
Association of Micro FinanceInstitutions of Uganda
Posters
Program Implementation - Channels
AMFIU
Association of Micro FinanceInstitutions of Uganda
Posters
Program Implementation - Channels
AMFIU
Association of Micro FinanceInstitutions of Uganda
Posters
Program Implementation - Channels
AMFIU
Association of Micro FinanceInstitutions of Uganda
Challenges
1. Sustainability of the program
2. Dependence on donor funding
3. Policy change by government
4. Lack of redress mechanisms
5. Adaptation to different situations
AMFIU
Association of Micro FinanceInstitutions of Uganda
Lessons learned
Consumers who are financially educated can take genuine responsibility for their financial affairs.
Understanding and awareness of the consumers influence how much benefits they derive from competition in the market place.
Effectiveness of information given to a consumer depends not only on the quality but also the capacity of the consumer to
understand it. Use of multiple channels is advisable.
AMFIU as the association is the sector’s custodian for embedding a long-term perspective into the decisions of MFIs
and consumers.
AMFIU
Association of Micro FinanceInstitutions of Uganda
Thank Youvery muchfor your attention
Zainabu Asiimwe, Consumer Affairs Specialist
AMFIU ([email protected])