Centre for Micro Finance at IFMR Research8th Floor, West Wing, Fountain Plaza, Khaleel Shirazi Estate31/2 A, Pantheon Road, Egmore, Chennai, 600 008, IndiaPhone: (91) 44 4289 2725 | Fax: (91) 44 4289 2799 | Web: www.ifmr.ac.in/cmf

Issue #11January/February 2010

viability of such training depends on the qualifications and motivation of the trainer. Additionally, a dearth of qualified and low-cost trainers may create obstacles to effective scaling up.

Motivated by the policy question of whether effective financial education can be delivered at reduced costs, this study focuses on education delivered through a series of video-based lessons. Video was chosen as the training medium both for consistency of content as well as the low barriers to scale, should the intervention prove impactful.

The study, led by Professor Shawn Cole at Harvard Business School, Dr. Bilal Zia at the World Bank and Dr. Jeremy Shapiro at Yale University, aims to test the efficacy of the intervention across a diverse group of people drawn from the slums of Ahmedabad, India. Saath, a local non governmental organization (NGO) with extensive operations in and around Ahmedabad (www.saath.org), agreed to allow its members to participate in the study.

The research team chose Saath as a partner based on the compatability of project’s research questions with the diversity of Saath’s clients and products/services. Saath serves male and female clients and as a cooperative, delivers micro-savings and other products alongside micro-credit. Further, Saath provides non-microfinance services to members, such as education, health, infrastructure development and employment interventions. Combined, this creates a sufficient number of groups to compare differential effects of the financial literacy training.

Saath currently works in six areas of Ahmedabad and reaches roughly 8000 people through its microfinance

New CMF Study!Do Financial Literacy Training Videos Make Cents?

By Dr. Jeremy Shapiro and Stuti TripathiThe microfinance movement represents a push to make financial products and services available to low-income households. Underlying this movement is the notion that access to products will allow households to accumulate savings, finance productive endeavours and better manage risks and cash flow.

Access, however, is only one of the factors limiting use of financial services. Evidence also suggests that there may be serious demand-side constraints, specifically low levels of knowledge and capacity, which limit the spread and impact of financial services.

Therefore in order for the microfinance movement to strengthen its potential to alleviate poverty, households must have sufficient knowledge about financial products and services to realize their value. Moreover, impact will hinge on whether decision makers in the household have the capacity to optimize the use of financial tools.

Driven by these lines of inquiry, a new Centre for Micro Finance study will test how providing education on various aspects of household finance influences financial literacy and whether it ultimately affects the household’s financial behaviour.

Various microfinance organizations across India currently offer such training, via trainer-group format, to their clients. While potentially valuable, the effectiveness and

In ThIs Issue

Do Financial Literacy Training Videos Make Cents? By Dr. Jeremy Shapiro and Stuti TripathiDr. Jeremy Shapiro is a post-doc fellow at Yale University and Stuti is a CMF Research Associate based out of Ahmedabad. Pg. 1

Studying the Effects of Health Insurance on New Mothers and Babies By Helena GarciaHelena is a student in the MPA-ID programme at Harvard’s Kennedy School of Government and in-terned at CMF during summer 2009. Pg. 2

Do Paper-based Surveys Have a Future? By Dr. Ajay TannirkulamAjay is the Head of the Analytics Unit at CMF. Pg. 4

State of the Sector-inspired Initative By Deepti KC Deepti is the program associate for the Microfinance Researchers Alli-ance Program .Pg. 5

Client Protection - A Boon or a Burden for MFIs? Interview conducted by Akhand Tiwari with Kate McKee of the Consultative Group for the Assist-ance of the Poor (CGAP). Akhand is a CMF research associate based

operations. Its total savings portfolio is about Rs 1.54 crore. In late 2007 Saath transitioned from an individual- to a group-lending model. Today, it has close to 300 Joint Liability Groups and about 1700 borrowers, with an outstanding loan portfolio of close to Rs 1.67 crore. Saath is also among a handful of MFIs in India that functions as a cooperative and offers a formal micro-savings facility to clients. Ekta and Sakhi Bachat Samiti, the two cooperatives promoted by Saath, were recently given permission by the Ahmedabad Municipal Corporation (AMC) to work in 20 wards of the city.

Drawing participants from Vasna and Behrampura areas of Ahmedabad, the study will invite roughly 1000 people to a computer centre over twelve months. Two-thirds (or about 667 participants) will be randomly assigned to a group that receives the aforementioned financial literacy videos on budgeting, loans, savings and insurance. The other participants will be shown videos on health topics pertinent to their context. Both the ‘treatment’ and non-treatment groups will participate in five video sessions lasting two hours apiece and followed by a discussion.

The ‘treatment’ group will be further sub-divided to assess if and what services, or combination of services, have an impact on financial behavior. For example, a random subset of the treatment group will receive payments if they successfully remember lessons from a previous video session. Another random subset will be given post-training deadlines such as opening an account, buying an insurance policy, etc; while yet another subset will be given access to a personal financial counselor to help him/her with financial planning and budgeting.

A final survey to measure differential impacts between the ‘treatment’ and non-treatment groups will be administered three months after people have watched the last video. As the project is staggered across four phases (with each phase holding screenings for about 250 people) some preliminary results can be expected by the end of 2010.

Studying the Effects of Health Insurance on New Mothers and Babies

By Helena Garcia and Knowledge Management Team

Why might you find Centre for Mi-cro Finance surveyors on an over-night bus in rural Karnataka carry-ing scales and measuring tape? Read on to understand.

In 2007, SKS Microfinance intro-duced “Swayam Shakti,” a health insurance cover for major events in-cluding catastrophic illness, accidents or the birth of a child. After piloting the policy in a branch in Karnataka, SKS rolled out the health insurance to 600 of its branches.

The Centre for Micro Finance, in col-laboration with the Abdul Latif Jameel Poverty Action Lab has been working to evaluate the impact of SKS’ health insurance combined with micro- credit on various household econom-ic, social and health outcomes.

As part of the impact evaluation, the CMF research team identifies preg-nant women and conducts a follow-up interview, if they are willing, immediately after the birth of their child. The visit combines anthropo-metric measures of the newborn and the mother as well as a paper-based survey with the mother. The follow-up visits and surveys were piloted and then launched in the first quarter of 2009.

Anthropometric measures are com-parative measures of the human body. By comparing actual measurements to standardized charts, it is possible to detect differences in nutrition and growth. In the case of newborn ba-bies, anthropometric measures can accurately capture the way a preg-nancy developed in terms of nutri-tion, etc., as well as pinpoint certain genetic characteristics.

A newborn baby’s weight fluctu-ates in the first few days, dropping sharply immediately after birth but rising again as the baby begins to eat. 2

Excerpt from the India Development Blog

A Day with Rickshaw Pullers

September 2nd 2009

By Deepti KC, CMF

One of the Microfinance Research-ers Alliance Program (MRAP) par-ticipants received funding to study how rickshaw pullers from Delhi manage their money. Last week, I visited Dehli and participated in interviewing several groups of rick-shaw pullers.

The study focused on understand-ing where these pullers migrated from, their livelihoods, how much they make and spend, what kind of items they spend on (such as alco-hol, tobacco etc), how many meals they take per day, etc. Most of the rickshaw pullers I met were from Bihar and shared similar stories.

On an average day, they made Rs. 200-250, out of which they paid Rs. 50 to the rickshaw owner, spent Rs. 20 on alcohol and/or tobacco and Rs. 20 on food. The remain-der they used to pay loans or saved. Not surprisingly, none of them had bank accounts. Some of the observations that I made that day included:

- None of them skipped their meals in order to save for the future.

- They had a very strong social net-work though only within their vil-lage group. Some pullers have been in Delhi for 10 years, yet they nev-er talked with pullers from other places even though they operated in the same neighborhood. They also preferred borrowing and lend-ing among these few trusted friends only.

- Only one had a rental apartment as he had recently got his wife and children to Delhi. The rest slept under the bridges or the rickshaw garages, used public toilets, skipped meals if failed to make enough money on any day, and surprising-ly, one of them mentioned that he

This variance can be controlled for by taking other measures that are highly correlated with birth weight, such as length and the circumferences of the head, chest and mid-upper arm. Mea-surements of chest and head circum-ference are also useful as the torso and head constitute the main part of the baby’s weight in the womb.

For a new mother, measuring the up-per middle arm circumference pro-vides information on muscle mass and –since low-income people in develop-ing countries are likely to have little subcutaneous fat - this indicator can be used to diagnose protein-energy malnutrition. The indicator also has less variance than others, such as waist circumference.

In order for anthropometric data on newborns to be useful, it is critical to record information within three days of delivery! Thus, the CMF survey team must always be on call or ready to visit new mothers. A complicating factor is that mothers-to-be sometimes relocate in the final weeks of pregnan-cy to be with extended fam-ily. The survey team must be prepared to traverse these distances to conduct the sur-vey.

Prior to the post-birth visit, members of the survey field team visit SKS center meet-ings and identify pregnant women. The women are asked about their pregnancy and requested to contact the team after the birth of their child. As an incentive for a new mother to call the survey team, the mothers are offered Rs. 50 if they call within the first 72 hrs of birth. If the mother calls the team, two surveyors travel to visit the mother and child.

A group of four Centre for Micro Finance surveyors has been trained to handle new-borns as well as how to take the measurements. They are also skilled at explaining the purpose of the visit as well as allaying any anxiety among the mother or her family.

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Anthropometric measures of the new-born baby and the mother yield in-sight into four areas -- some directly related to the impact evaluation and others more tangential:

1. Characteristics of the study popu-lation. Maternal age and anthropom-etry are significantly associated with newborn anthropometry, particularly birth weight. Higher maternal anthro-pometric means are associated with higher birth weights. Furthermore, low birth weight has been found to be positively correlated with mother’s age (women younger than 20 or older than 30), low income group, and low education. It has also been found that mothers who visit a doctor before giv-ing birth have heavier babies on aver-age.

Measurements at birth can also serve as predictors of future health conditions for an individual. Lower birth weight and ponderal index (weight/length) are associated with a higher risk of adult cardiovascular disease, and both

low and high birth weight with an in-creased risk of type II diabetes.

2. Self-selection into the insurance. At the time of the survey, SKS micro-finance clients in the study areas were required to buy health insurance if they wanted to take a loan; they also had the option of, for a slightly higher premium, including up to three family members in the same policy. Since ma-ternity is one of the explicit benefits of this product, and it is a condition that is not necessarily unexpected, it can be the case that some family members are included because they are expecting a baby and want the health insurance to cover the delivery in a clinic. These women might have some underlying characteristic that makes them choose insurance and also to take better care of themselves during pregnancy, so their babies will have different anthro-pometric measures than non-insured women.

3. Usage of insurance. The maternity benefit of the health insurance was in-

cluded as something that would appeal to its clients. With the fol-low-up survey it is possible to see if insured mothers are using their coverage during birth and why or why not.

4. Effect of delivering the baby in a clinic or hospital versus home deliveries. This is especially sig-nificant for complications during childbirth. Its expected that in-surance will effect where women choose to give birth (the insurance only covers deliveries in clinics or hospitals), which might effect what happens in the case of com-plications; including how costly it is for the family to deal with these situations.

Results from the survey will be forthcoming in 2010.

A new mother’s upper arm is measured by CMF field team as part of the SKS New Mothers survey (photo by Helena Garcia)

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Is There a Future for Paper-based Surveys?

By Dr. Ajay Tannirkulam, Head of Analytics Unit

Paper-based surveys have long been the bread and butter for empiricists such as economists, political scien-tists and public health experts. In the absence of alternative technolo-gies, paper-based surveys have been faithful servants to the social science and the formation of policy.

However, even a casual observer will notice that despite their utility, tra-ditional paper surveys have recurring problems. Some of the frequent is-sues encountered during surveying and subsequent data entry include – (i) logical inconsistencies in surveyor entries, (ii) questions left blank at the surveyor’s whim, and (iii) inaccu-rate work by data entry companies.

Even after survey re-sponses have been re-corded, per Institutional Review Boards (IRBS) requirements, they must be stored for several years before disposal. Logistics for this, such as protect-ing the paper from ro-dents, pests and humid-ity, present a host of new challenges. 1

In the last few years, technology has opened up new avenues for sur-veying. Personal Digital Assistants (PDAs), mobile phones supported by voice recognition software, elec-tronic tablets and mini laptops are a few of the high-profile arrivals. Re-search groups (see Patnaik, Brunskill and Thies 2008 for a review) have begun incorporating some of the technology into their data collec-tion schemes. Patnaik et al., for example, tested some of these tools (also compiling literature data) and, 1. Professor Chris Blatmann http://chrisblatt-man.blogspot.com/ does an excellent job at ex-pressing general frustration with paper surveys.

PDAs and voice transfer seemed to have passed with flying colors with better than 99.5% transcription ac-curacy.

The Centre for Micro Finance pro-cesses more than 15,000 paper-based surveys annually; despite its heavy reliance on paper surveys for data collection, institutionally it is open to technological innovation and po-tential efficiency gains. In fact, CMF has already piloted surveys using PDAs.

CMF piloted a brief, three-page microfinance take-up survey in and around Allahabad, Uttar Pradesh, in March 2009. The pilot utilized five Palm Centros programmed with Pendragon software, a fairly user-friendly platform. The entire process of hardware purchase, soft-ware procurement, survey design and testing took less than two-

and-a-half weeks to complete. The data collection in the field was also smooth. Motivated by this success CMF also conducted an elaborate test of PDAs in late November 2009 with CMF’s weather insurance project in Gujarat.

For an organization conducting large surveys on a regular basis, PDAs may make economic sense. Take the fol-lowing costing scenario for a com-pany that, on average, targets several thousand households per large scale survey:

To complete a sixty-page paper-based survey that targets 3000 households

preferred having alcohol than food.

- The only way for them to trans-fer money to loved ones in their respective villages was through lo-cal travelers who came to the city from their villages to collect money from them. Obviously, such money collectors charged for their services. Whenever such people came to the city, these rickshaw pullers bor-rowed money from the local mon-eylenders. One group relied on a manager of a local motel, and the other group relied on an owner of a tea shop. They viewed these mon-eylenders as saviors and had high regards for them.

It was interesting to understand that in order to send money to their families, these rickshaw pullers paid interests to two parties - the mon-eylender as well as the person who came from the village to collect money from them. Most of them realized this problem and expressed their desire to open bank accounts. The following were related observa-tions:-

- Most of them knew about smart cards, ATMs; one puller even knew that money could be transferred through the internet.

- All of them mentioned that they wanted to open bank accounts. All asked how we could help them in opening bank accounts.

It was interesting to find out that while all of the rickshaw pullers I met knew the importance of bank accounts and talked about how bank accounts would reduce the costs of transfering money to their famillies, none of them knew the procedure to open a bank account. Alas!

http://www.indiadevelopment-blog.com/2009/09/day-with-rickshaw-pullers.html

A CMF surveyor interviews a microfinance cli-ent in Orissa using a paper survey. Will the next round of surveys use PDAs?

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in a month will need approximately thirty surveyors; subsequent data entry for the paper surveys will cost roughly $2600. A standard PDA with reasonable features costs approximately $150 (~Rs. 7000). For the same survey and timeline, thirty PDAs would to-tal $4500 as an initial up-front in-vestment. But, PDAs eliminate the need for data entry and can be used anew after the first survey is done.

Thus, it would only take two large surveys (approximately 3000 house-holds) using PDAs for the initial $4500 investment to be recovered vis-a-vis paper surveys.

Of course PDAs are not without their drawbacks, the largest being the high costs of vernacular soft-ware. In a country like India where spoken languages and scripts change every 600-800kms, software in the Roman Script is a potential down-side. It could be difficult to find local surveyors comfortable in the area’s vernacular as well as English. Additional drawbacks of PDAs are that their screens are small, pictures or animations are hard to display, and electronic respondent games, a feature in many surveys, are hard to implement.

Looking beyond PDAs, laptops like the Dell Inspiron Mini 9 and HP MiniNote are small, lightweight and extremely portable. They pack a fair fraction of the capabilities of a stan-dard PC and will soon be available in the $300 range, making them ec-onomically viable for large surveys. Like PDAs, mini laptops allow both

viewing and analysis of survey data on the same day of data collection. Software can be designed to force surveyors to enter only logically consistent data, eliminating a key difficulty with paper-surveys. Fur-thermore, laptops allow researchers to include cognitive games and ran-domize question order in surveys.

Paper surveys are a deeply ingrained part of social science research and re-searchers have developed a love-hate relationship with them. Replacing them will likely be a slow process. But given the abundance of inno-vative new technology, conducting field surveys will certainly see chang-es over the decade.

State of the Sector-inspired Initiative

By Deepti KC

One of Microfinance Researchers Alli-ance Program’s objectives is to narrow the gap between research and practice by fostering knowledge partnerships between researchers and entities that provide financial services for the poor. Keeping to that objective, CMF has launched an initiative inspired by the State of the Sector Report, the seminal document on the Indian microfinance sector.

The initiative was designed to fund se-lected MRAP participants to conduct a field-based overview of a particular region and the status of microfinance therein.

As a launch for this initiative, CMF organized a workshop at the Ford Foundation office in New Delhi on

October 29-30th 2009. The purposes of this workshop were twofold: (a) to understand the ideas of each MRAP scholar and their individual plans to execute the initiative and; (b) to pro-vide a platform where the scholars could receive feedback from MRAP advisor Dr. Malcolm Harper and Mr. N. Srinivasan, Author, State of the Sector Report.

During the workshop, the scholars’ project plans fell into one of two types: (i) broad, multi-district examinations of microfinance at a state level and; (ii) focused, issue-based examinations with a geographic area in mind. Dr. Harper and Mr. Srinivasan gave exten-sive and tailored feedback to each of the MRAP participants who present-ed. Following the workshop, MRAP participants were given several weeks to incorporate the workshop feedback and revise their plans.

MRAP scholars plan to study mi-crofinance in most regions of India, through individual research inter-ests. Selected states include Uttara-khand, Gujarat, Uttar Pradesh, Rajas-than, Karnataka, Tamilnadu, Madhya Pradesh, Jharkhand, West Bengal and Assam, among others. Revised topics include an examination of marketing strategies for MFIs, an exploration of microfinance and women empower-ment, and a study of how women in mature self-help groups behave.

At the end of the year, the scholars will be asked to present a report of their findings, which Centre for Micro Fi-nance will compile and publish.

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Client Protection - A Boon or a Burden for MFIs?

Interview with Kate McKee

By Akhand Tiwari

Akhand Tiwari, Centre for Micro Fi-nance Research Associate and podcast host, caught up with Kate McKee at the Microfinance India Summit in Delhi in October 2009. We chatted with her about the current paradigms of client protection and the move-ment’s engagement with practitioners. This interview is also available on CMF’s podcast:

http://ifmr.ac.in/cmf/podcast.html

Akhand Tiwari: Kate, can you tell us some of the main issues in consumer protection?

Kate McKee: Worldwide, client pro-tection [in microfinance] has crystal-lized around six core principles. The first is avoiding over-indebtedness and having suitable products. The second is transparency and we’re not just talk-ing about transparency of prices but we think it’s critically important that clients also understand the terms and conditions of the financial services that they’re taking and what the key risks are as well as their own rights and obligations.

The third principle is appropriate col-lections practices, the fourth is staff ethics, the fifth is effective recourse mechanisms, so it’s not enough to just have a complaints box sitting next to the teller if people don’t really be-lieve that their concerns are going to be heard. We heard an interesting ex-ample last night where one institution has chosen to put the CEO’s mobile number on all the loan contracts, so if the clients have a problem they call the CEO. So that’s a more effective recourse mechanism. And the final principle is data privacy and confiden-tiality.

Now if I look at the Indian situa-tion it seems that a number of these [principles] are covered by the current

CMF Conference Updates Risk Mitigation in Agriculture August 11th 2009

In conjunction with SEWA, the Centre for Micro Finance held a one day conference on Tuesday, August 11th 2009 titled, “Risk Mitigation in Agriculture.” Speakers at the con-ference included Professor Shawn Cole, CMF Principal Investigator (Harvard Business School) and Kol-li Rao, Deputy General Manager of the Agricultural Insurance Compa-ny of India (AIC).

http://ifmr.ac.in/cmf/semi-nars_conferences/agrisk.html

Financial Inclusion Summit: December 4th 2009

For the second year in a row, the Centre for Micro Finance was the knowledge partner for the Eco-nomic Times’ Financial Inclusion Summit 2009. This year the sum-mit hosted speakers including Plan-ning Commission deputy chairman Montek Singh Ahluwalia, along with Nandan Nilekani, chairman of the Unique Identification Authority of India.

Status of Microinsurance in India : December 10/11th 2009

In collaboration with the Centre for Insurance and Risk Management (CIRM) and the UNDP-India, the Centre for Micro Finance organized a two-day conference on the status of microinsurance in India.

http://ifmr.ac.in/cirm/confer-ence.htm

Microfinance: Translating Research into Practice: January 8/9th 2010

For the third straight year, the Cen-tre for Micro Finance and the Col-lege of Agricultural Banking (CAB) hosted a conference on microfinance research. Distinguished speakers in-cluded Professor Jonathan Morduch and Professor Abhijit Banerjee.

http://www.ifmr.ac.in/cmf/seminars_conferences/cab_conf2010.html

Fair Code practices that the Reserve Bank of India (RBI) has issued. I have the impression that the statement of intent is out ahead of practice a bit, and so there is awareness of issues but they’re not being fully implemented on the ground.

Akhand: There is a basic assumption of 100% client repayment rate. Do you think this basic assumption is too rigid and ultimately leads to issues which actually put us in the situation where we need to talk about client protection?

Kate: Yes, and if you don’t mind I want to make a quick distinction. When we use the term consumer pro-tection we’re thinking about all con-sumers in the market. We tend to see that more as a matter of regulation. Regulators should be concerned about all consumers in the market. We use the term client protection to be clear that, “this is the responsibility of pro-viders for your own clients to be sure that you’re treating them fairly and that you’re not causing unintended harm to them.”

What has struck me in the last couple of days during discussions on client protection and responsible finance is that providers are putting their fingers on some really important issues. One of them is what you mentioned, if we expect 100% loan recovery and 0% percent delinquency, it is both unre-alistic and inappropriate and it drives some of the behavior that we’re seeing, overly aggressive collections for exam-ple. It even raises issues of staff ethics.

A second issue raised is around prod-ucts themselves. India is pretty-much a mono-product microfinance sector - group loans, joint guarantee. There are very rigid products and repayment expectations and this also drives some of the problems that we see. If you don’t have opportunities to tailor the products to the actual cash flow of the household, you’re more likely to run into over-indebtedness problems and it raises transparency issues as well.

And if I can just add that one more issue that’s come up is staff incentives and a recognition that staff incentives not focus only on volume. In a growth 6

internal controls, client communica-tion has emerged as a really impor-tant issue. What’s in your document? Are they plain language? Are they lo-cal language? Are you communicat-ing with clients in ways that they can reasonably understand? I think this

would be a great tool we’d love to see it widely available and used in India. Also I’d like to mention the SMART CAMPAIGN – putting clients first in microfinance. It’s a global campaign that now has more than 700 institu-tions that have endorsed it, and in endorsing they’ve said not only do we think these six principles are good but we also commit to implementation.

For more on the Client Protection movement please visit some of the fol-lowing resources:

Website of the SMART Campaign: http://www.thesmartcampaign.org/

Center for Financial Inclusion at AC-CION International (host of the Be-yond Codes Movement): http://www.centerforfinancialinclusion.org/

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environment there’s a temptation to focus a lot on volume of portfolio and loan officer productivity, but also it’s not enough to say well we’re doing both volume and PAR in our staff in-centives because if you just do PAR it can drive the temptation for overly ag-gressive collection practices. So I think there’s a recognition we need a more nuanced and more balanced set of in-centives for loan officers.

Akhand: You have been part of this discussion all along and have been in conversations with microfinance insti-tutions. What are some of the things that are being done?

Kate: So as a representative of the Global Smart Campaign for fair treat-ment and client protection, we don’t presume to tell practitioners in any single country or market how they should go about this because we rec-ognize that the circumstances are spe-cific the context is specific, the risks in any market, which areas are most problematic, transparency or over-in-debtedness or collections recourse.

So our philosophy is, let’s explore these principles together, and see which of them should be priorities for which parts of the Indian microfinance sec-tor. Here we’ve been focused on NB-FCS and specialized MFIs, I’m sure there are different issues with the SHG model or the cooperative model. So let’s explore together what are the pri-orities, let’s be realistic that there are some challenging tradeoffs around for example, price transparency, quality of products at the same time that you’re trying to scale up quickly. And let’s see this as a process, where we would love to find ways to support the industry as they find ways to move forward.

I think the roles the campaign and CGAP can play are essentially two-fold. a) Bring experience/examples from providers in other countries that

can be relevant and; b) create stronger incentives by working with other in-vestors and other funders to be both looking for better behavior and sup-porting the move to better behavior.

Akhand: So Kate what kinds of tools

are available to providers?

Kate: The most powerful tool I’d like to highlight that is available on the campaign website, is the self-assess-ment diagnostic tool that’s intended to be used by providers for them to look deeply at how they stack up against each of the six principles.

There are modules on over-indebted-ness, on transparency etc. I think its power comes from the fact that is has been developed with practitioners so the process over the last year to engage deeply with about 25 practitioners; ranging from large NBFCs to even a downscaling bank, cooperatives, NGOs (big and small), to see what makes sense to them in their own context. It’s powerful for providers in this market and elsewhere because it so specific it really gets to the issues around staff incentives, credit policies,

Kate McKee is a senior adviser for Policy, Outreach and Aid Effectiveness at the Consultative Group for the Assistance of the Poor (CGAP), where she joined in 2006. She is also one of the leading advocates and promoters of the Client Protection movement within microfinance.

Recent events in India and elsewhere have put client protection atop the agenda for practitioners and policymakers. But will the rhetoric trickle down to clients, like this group in Kanchipuram, Tamil Nadu? (photo by Alex Kobishyn)

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