A global initiative to create an environment in which financial services are delivered safely and responsibly to underserved consumers.
From 2009 to 2020, the Smart Campaign was a global initiative led by CFI that created an environment in which financial services are delivered safely and responsibly to underserved consumers. The Campaign developed the Client Protection Principles, the first global financial consumer protection standard, and established a rigorous certification program to validate responsible practices by financial service providers.
CFI transitioned the certification program and standards to Cerise+SPTF in 2020.
135+
CFI certified more than 135 financial institutions across 42 countries for adhering to the Smart Campaign’s Client Protection Principles.
62M
From 2009-2020, Smart Certified financial institutions collectively served more than 62 million low-income clients.
Client Protection Principles
The global standards for financial consumer protection
The Client Protection Principles were designed to serve as the minimum standards that clients should expect to receive from a financial service provider.
The Principles were derived from the work of providers, international networks, and national microfinance associations. The standards serve as the baseline by which providers of financial services should adhere when designing and delivering products and services to consumers.
Client Protection Principles:
Providers will take adequate care to design products and delivery channels in such a way that they do not cause clients harm. Products and delivery channels will be designed with client characteristics taken into account.
Providers will take adequate care in all phases of their credit process to determine that clients have the capacity to repay without becoming over-indebted. In addition, providers will implement and monitor internal systems that support prevention of over-indebtedness and will foster efforts to improve market level credit risk management (such as credit information sharing).
Providers will communicate clear, sufficient, and timely information in a manner and language clients can understand so that clients can make informed decisions. The needs for transparent information on pricing, terms, and conditions of products is highlighted.
Pricing, terms, and conditions will be set in a way that is affordable to clients while allowing for financial institutions to be sustainable. Providers will strive to provide positive real returns on deposits.
Financial service providers and their agents will treat their clients fairly and respectfully. They will not discriminate. Providers will ensure adequate safeguards to detect and correct corruption as well as aggressive or abusive treatment by their staff and agents, particularly during the loan sales and debt collection processes.
The privacy of individual client data will be respected. Providers will only use client data for authorized purposes and with client consent. They will maintain systems to keep client data from being released improperly or misused and to protect clients from fraud, whether by internal staff, partner companies, or bad actors.
Providers will have in place timely and responsive mechanisms for complaints and problem resolution for their clients and will use these mechanisms both to resolve individual problems and to improve their products and services.
The History of the smart campaign
Keeping Consumers at the Center of Inclusive Financial Services
2008
Origins
In April 2008, dozens of financial inclusion leaders came together to discuss the future of microfinance and examine potential risks to its ongoing growth and success. Their findings, outlined in the Pocantico Declaration, agreed on the need for an industry‐wide code of conduct and a proactive assertion of microfinance as a double bottom line industry. The Client Protection Principles (CPPs) were developed to serve as the baseline standards by which providers should adhere to when designing and delivering financial products and services to consumers.
2009-2012
Smart Campaign launched and gains momentum
To support adherence to the Principles, CFI formed a diverse global coalition of industry experts — this was the birth of the Smart Campaign. The Campaign worked to build capacity and incentives for strong client protection practices across the industry and developed self-assessment tools for FSPs to evaluate their performance against the CPPs. It developed training materials for impact investors to incorporate client protection into their due diligence, and accredited trainers and assessors to evaluate FSPs’ practices. The Campaign created memorandums of understanding with more than 30 national and regional associations of microfinance institutions in Africa, Latin America, Asia, the Middle East and Eastern Europe, representing close to 1,000 institutions. The Smart Campaign was guided by a steering committee with representatives from CGAP, KfW, IADB, BBVA, Uiijvan, the Microfinance Centre, UNCDF, Deutsche Bank, the BSP, the SBS, LendStreet, and ENDA, among many others.
2013
Smart Certification Developed
The Campaign created the Smart Certification program as a way to formally benchmark how providers’ operations performed against the CPPs and to incentivize the improvement of consumer protection practices. The Smart Campaign acted as the certification manager and licensed third-party rating agencies specialized in inclusive finance to carry out the certifying missions. From 2013-2020, the Smart Campaign Certification program certified 135+ institutions serving more than 62 million clients around the world. The Smart Certification program inspired similar industry efforts, including the GSMA Mobile Money Certification and the Gogla Code of Conduct for pay-as-you-go providers.
2015
Model Law and Consumer Voice
The Campaign expanded its work to directly reach regulators and consumers. In collaboration with the Microfinance CEO Working Group and with technical support from international law firm DLA Piper, the Campaign published a high-level, activities-based model law. This document was released with the intention to apply equally to all financial-services providers and was translated into multiple languages. A second edition was published in 2019. The Campaign also conducted extensive demand-side research to understand the concerns, issues, and challenges consumers faced with FSPs, and executed several consumer-facing edutainment campaigns to build awareness around consumer risks such as fraud, over-indebtedness, and transparency.
2017
Addressing Responsible Digital Finance
As more providers digitalized their operations and fintechs increased in prominence, the Campaign sought to understand consumer risks in digital financial services, focusing specifically on digital credit products and agent banking models. After piloting new benchmarks for responsible digital practice, the Campaign launched the Client Protection Standards for Digital Credit as well as a working group of fintech leaders called Fintech Protects.
2020
Client Protection Standards Transition
CFI closed the Smart Campaign and transitioned the management and maintenance of the certification standards to long-time partners Cerise+SPTF. The shift was part of CFI’s strategy to focus on research and convening efforts in our core priority areas: consumer protection, responsible data practices, climate risks & resilience, and women’s financial inclusion. Cerise+SPTF subsequently launched the Client Protection Pathway, an initiative to support client protection implementation and offer a wealth of financial service provider-focused tools publicly available via their Resource Center.