The SMART Campaign is a global effort to unite microfinance leaders around a common goal: “to keep clients as the driving force of the industry.” The underlying principle of the Campaign is that protecting clients is not only the right thing to do. It’s also the smart thing to do. The Campaign adheres to the seven Client Protection Principles (CPPs), with which it seeks to ensure the highest standards of client care in the microfinance industry, particularly in the developing world and for those at the base of the pyramid. To help the microfinance industry remain both socially focused and financially sound, the SMART Campaign is working with microfinance leaders from around the world to provide microfinance institutions (MFIs) with the tools and resources they need to deliver transparent, respectful, and prudent financial services to all clients, thereby positioning the industry as a model of responsible banking.
SMART certification is considered an essential step for MFIs in the industry by many investors, microfinance networks, and even some national regulators.
Certification helps investors, donors, and regulators distinguish financial institutions that put clients first. Public recognition of client protection best practice improves internal controls, mitigates reputational and regulatory risks and provides opportunities for enhanced social licence to operate and increased market share. SMART certified MFIs also report that certification increases staff morale.
It also attracts responsible and impact investors. By directing investments to certified institutions, an investment fund can send a strong message that it takes client protection seriously. The IDB, Deutsche Bank, FMO, Triodos and Oikocredit all look for SMART Certification as an important factor in selecting investees. And, with an increasing focus on credit provision as a key tool in achieving sustainable development goals, the ability to demonstrate client centricity and adequate client protection sets an MFI apart.
EBS Advisory is currently in the final stages of seeking approval status (through the US-based NGO, Accion) to become an accredited SMART certifier or Certification Body. Obtaining the license will enable EBS to conduct SMART audits against the CPPs for MFIs and provide SMART status to those companies that are able to demonstrate best practice in client protection. We aim to benefit our existing private equity clients by boosting the quality of their MFI investments and overall portfolio.We will also provide this service to MFIs looking to verify or improve customer protection and thereby enhance business performance, attract responsible investment partners and generally ensure a positive contribution to sustainable development.