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Transparent Pricing for Responsible Pricing
Alexandra Fiorillo, Vice President
www.mftransparency.orgDecember 1, 2010
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• What is transparent pricing?• Examples of constructive transparency
regulation • How is industry-led self-regulation working?• What does this mean for responsible
pricing?
Agenda
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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.
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Transparency Must Come First
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Combined Approach
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How Do We Define a Transparent Price?
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How Do We Define a Transparent Price?
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Price Depends on Loan Size… and Other Factors
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Average Portfolio Yield Masks the True Price
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Portfolio Yield Hides Price Variations
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What Can We Learn From Truth-in-Lending Legislation?
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Example 1: Cambodia
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Example 2: Bosnia
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Example 3: Peru
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MFTransparency facilitates self-regulation on pricing transparency.
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What have we learned?
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What have we learned?
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2010 Kenya Pricing Data
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Business loans, 12 month terms
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Why so much price variation?
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How does transparency affect pricing?
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What does this mean for responsible pricing?
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Conclusions
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Promoting Transparent Pricing in the Microfinance Industry
