AMFIU Association of Micro Finance Institutions 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 Finance Institutions of Uganda Outline Background ( ) Why AMFIU Transparency program (since 2007) Transparency program - Implementation Role of stakeholders Challenges Transparency in Practice Lessons learned

AMFIU Association of Micro Finance Institutions of Uganda Background ( ) 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 Finance Institutions 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 debtContinue 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 loanHighest 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 Finance Institutions of Uganda Long term consumer interestLong 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 Finance Institutions of Uganda Foundation: 1 st phase of CEP ( ) CEP-Launch and Dissemination in 35 districts MFIs compliant to CCP Lobby and advocacy TOT and Training Manuals for MFIs client trainings Handbook on CE Display of fees and interest rates / total cost Informed Choices Knowledge Sharing Rights and Responsibilities Institutionalizing of Market drive Marketing of Performance Monitoring (PMT/PMS) Transparency program (since 2007)

AMFIU Association of Micro Finance Institutions 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 Finance Institutions 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 Finance Institutions of Uganda 3. 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 Finance Institutions of Uganda Posters Program Implementation - Channels

AMFIU Association of Micro Finance Institutions of Uganda Posters Program Implementation - Channels

AMFIU Association of Micro Finance Institutions of Uganda Posters Program Implementation - Channels

AMFIU Association of Micro Finance Institutions 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 Finance Institutions 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 sectors custodian for embedding a long-term perspective into the decisions of MFIs and consumers.

AMFIU Association of Micro Finance Institutions of Uganda Thank You very much for your attention Zainabu Asiimwe, Consumer Affairs Specialist AMFIU