First, Do No Harm
Socially responsible, inclusive financial services should ultimately help clients to thrive—to meet daily needs, take advantage of opportunities, manage life’s risks, and pursue their dreams. But at a minimum, financial services should do no harm. Financial service providers have an obligation to ensure that their products and services avoid harming clients.
Twenty years of research and refinement of best practices in the inclusive finance industry have brought together 8 Client Protection Standards which ensure that financial services are delivered to clients in a safe, responsible, and fair manner. These standards are fully incorporated within the Universal Standards for Social and Environmental Performance Management.
Client protection is not the whole story of social and environmental performance management—but it is a minimum moral obligation for every financial service provider and for the investors who support those institutions.
Focusing business strategy towards clients increases their trust and loyalty. And client protection lays the foundation for a prosperous market and ensures the well-being of all customers in financial value chains.
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A Pathway to Guide Implementation
The Client Protection Pathway describes the steps that a financial service provider can take to implement the client protection practices necessary to avoid harming clients and communicate this progress to investors. The Pathway gives providers a roadmap for implementing the Client Protection Standards and helps them stay on track. You can read our frequently asked questions about the CP Pathway and also contact us here.
Protecting your clients is essential to your business and to their welfare, but it is not easy. At every step on the Pathway, we have resources and support ready for you. When you join the Client Protection Pathway, you join a global network of people who are committed to client protection.
Brief History
From its origins in the early 1970s, responsible inclusive finance (better known then as microfinance) claimed to have a double bottom line: a social mission as well as a business case. Significant donor and investor funding, as well as public goodwill, was mobilized on that basis. But because there were no clear, universally accepted standards about how to measure social performance and protect the interests of low-income, vulnerable clients, the global state of practice was uneven. By the mid-2000s, it was obvious that good intentions were not enough. A series of client-protection initiatives got underway, culminating in the 2021 launch of the Client Protection Pathway, under the leadership of Cerise+SPTF.
2003
CERISE launches the SPI1 tool.
2008
A wave of downfalls and popular uprisings in various countries shakes the microfinance industry and the confidence of borrowers and investors. (Bosnia, India, Pakistan, Nicaragua Morroco..) The Pocantico Declaration responds to indebtedness crisis in microfinance and recognizes client protection failures.
2009
The Smart Campaign launches at the Center for Financial Inclusion at Accion around the Client Protection Principles (CPPs).
2010
Microfinance is moving away from the idea that providing access to finance is sufficient.
2012
The Social Perfomance Task Force (SPTF) releases the Universal Standards for Social Performance Management (USSPM).
2013
Smart Certification program launches, providing external recognition for client protection achievement. Certification reaches 100 institutions in 2018!
2020-2021
Smart Campaign announces its closure in July 2020.
Cerise+SPTF commit to the preservation and advancement of Client Protection and launch a large market consultation.
In September 2021, Cerise+SPTF launch the Client Protection Pathway.
2022 and Beyond
Cerise+SPTF continues to pursue a series of initiatives aimed at raising awareness and uptake of client protection.
The global community of stakeholders who are serious about building a better future for clients continues to grow.