Page 1
[email protected] www.e-mfp.eu
Transparent Pricing for Responsible Pricing
Alexandra Fiorillo, Vice President
www.mftransparency.orgDecember 1, 2010
Page 2
[email protected] www.e-mfp.eu
• What is transparent pricing?• Examples of constructive transparency
regulation • How is industry-led self-regulation working?• What does this mean for responsible
pricing?
Agenda
Page 3
[email protected] www.e-mfp.eu
What is Transparent Pricing?
Transparent pricing means the pricing, terms, and conditions of financial products will be transparent and adequately disclosed in a form understandable to clients.
Page 4
[email protected] www.e-mfp.eu
Transparency Must Come First
Page 5
[email protected] www.e-mfp.eu
Combined Approach
Page 6
[email protected] www.e-mfp.eu
How Do We Define a Transparent Price?
Page 7
[email protected] www.e-mfp.eu
How Do We Define a Transparent Price?
Page 8
[email protected] www.e-mfp.eu
Price Depends on Loan Size… and Other Factors
Page 9
[email protected] www.e-mfp.eu
Average Portfolio Yield Masks the True Price
Page 10
[email protected] www.e-mfp.eu
Portfolio Yield Hides Price Variations
Page 11
[email protected] www.e-mfp.eu
What Can We Learn From Truth-in-Lending Legislation?
Page 12
[email protected] www.e-mfp.eu
Example 1: Cambodia
Page 13
[email protected] www.e-mfp.eu
Example 2: Bosnia
Page 14
[email protected] www.e-mfp.eu
Example 3: Peru
Page 15
[email protected] www.e-mfp.eu
MFTransparency facilitates self-regulation on pricing transparency.
Page 16
[email protected] www.e-mfp.eu
What have we learned?
Page 17
[email protected] www.e-mfp.eu
What have we learned?
Page 18
[email protected] www.e-mfp.eu
2010 Kenya Pricing Data
Page 19
[email protected] www.e-mfp.eu
Business loans, 12 month terms
Page 20
[email protected] www.e-mfp.eu
Why so much price variation?
Page 21
[email protected] www.e-mfp.eu
How does transparency affect pricing?
Page 22
[email protected] www.e-mfp.eu
What does this mean for responsible pricing?
Page 23
[email protected] www.e-mfp.eu
Conclusions
Page 24
[email protected] www.e-mfp.eu
Promoting Transparent Pricing in the Microfinance Industry