Microfinance Focus, January 18, 2012: Microfinance CEO Working Group, a group of eight microfinance CEOs from leading organizations has called for the microfinance industry to focus on responsible and client-centered microfinance.

Issuing a Road Map for the Industry, the Working Group urges microfinance practitioners to endorse the Smart Campaign, MicroFinance Transparency, and the Social Performance Task Force’s universal standards for social performance management.

All three of these initiatives are working to put in place an architecture that will assist the industry to reach and maintain its highest goals and standards. Each has made important initial accomplishments, and each will need full industry support in order to achieve its potential, it said.

Problems of client overindebtedness in a number of markets (India, Bosnia, Nicaragua, and Morocco, among others) have received substantial media, political, and in some cases regulatory attention, with repercussions for the larger microfinance community.

To ensure greater focus on client benefit and prevent future problems, microfinance needs to develop robust practices to protect, effectively serve, and support clients. The industry needs high-quality and standardized principles and procedures that ensure ethical, transparent business and client safety, the working group said.

Recognizing that poor live far more complex financial lives than previously assumed MFIs are advised to offer a broader array of products and services that are tailored to meet client needs.

The Group envisions a microfinance industry that protects its clients, is transparent, and measures and achieves social outcomes and impact.

At this moment, microfinance has an opportunity to build on past successes, learn from, and respond to the challenges it faces in order to be a more responsive, responsible, and transformative industry. By taking sincere and systematic action, we can build more successful financial institutions that help change the lives of the people we serve, it said.

Currently, Working Group members include ACCION, FINCA International, Freedom from Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer, VisionFund International (World Vision’s microfinance arm), and Women’s World Banking. It is housed at the Center for Financial Inclusion at ACCION.