[PLENARY] Client Protection in a post-Smart sector

  • Eliki BOLETAWA, Alliance for Financial Inclusion
  • Vahdet ANADOLLI, AFK Kosovo
  • Timothy CARSON, Premier Credit
  • Laura FOOSE, Social Performance Task Force (SPTF)
  • Emmanuelle JAVOY, Symbiotics
  • Aldo MOAURO, MFR
  • Moses MUSANTU, Bank of Zambia


With COVID-19 raging and the world going through what seem like era-ending changes, a major milestone in the sector was the winding up of the Smart Campaign, which made client protection a byword for socially-oriented financial institutions. What does the Campaign’s closure mean for client protection? Are its principles so embedded now that it has served its purpose? What does it mean for the 100+ organisations who have attained its coveted Client Protection Certification? Where does the sector go from here – forwards or backwards? This session featured leading organisations that have made client protection a core of their work.


Eliki BOLETAWA from the Alliance for Financial Inclusion welcomed the various panellists. He introduced the session by emphasising the importance of client protection as the COVID-19 crisis impacts financial service providers and microfinance clients. He referred to the main topic to be discussed during this session: the outlook for client protection in context of the new client protection framework following the end of the Smart Campaign, a global campaign supported by microfinance leaders committed to the principles of client protection.

Laura FOOSE conveyed two important announcements in relation to the closure of the Smart Campaign. She explained that SPTF, in partnership with CERISE, is now stewarding the Client Protection Standards which have always been part of the Universal Standards, and they will house all the client protection resources on the SPTF Resource Center. Further, they are working with investors and rating agencies to develop a new way for FSPs to demonstrate their progress toward client protection best practice, which they are calling the Client Protection Pathway. Having this pathway will also help investors to more easily identify organisations with a real commitment to client protection. 

By reimaging how FSPs and investors interact with the Client Protection Standards in cooperation with the Social Investor Working Group, the Client Protection Pathway Initiative aims to achieve:

  • Increased numbers and types of FSPs that want to improve their client protection practices;
  • Increased transparency in terms of external communication of FSP’s commitment to client protection.

Emmanuelle JAVOY presented Symbiotics’ perspective on the design of the Client Protection Pathway Initiative. The Client Protection Pathway Initiative acts as a trusted source for investors to identify FSPs with strong client protection practices. She referred to the first step of the Client Protection Pathway, being commitment. The next step is self-assessment and evaluation, followed by the step of external verification. External stakeholders increasingly demand accountability and transparency from FSPs. The requirement for FPSs to commit to sharing current client protection practices, lowers the barrier for investors to engage in due diligence, and offers an entry point for external evaluation.

Aldo MOAURO explained MFR’s post-Smart approach to the process of client protection certification. He introduced the new Client Protection Principle Framework as being aligned with existing client protection standards and compliance criteria, which allows for continuity and harmonisation. Moauro stated that the new certification methodology drew on experiences during the Smart Campaign, improving inclusion and transparency. This in turn is expected to lead to lower average annual costs and reducing the timeline of compliance. The Client Protection Pathway is based on a three-tier system to incentivise gradual improvement rather than a pass-fail system. This encourages more FSPs to become certified and communicate their achievements in a transparent way to both investors and clients.

Vahdet ANADOLLI and Timothy CARSON brought the MFI perspective, discussing how AFK Kosovo and Premier Credit in Kenya view the Client Protection Pathway Initiative. Overall, they consider it to be an improvement from the Smart Campaign methodology, reflecting client protection as a core objective. According to Carson, crucial concerns in the client protection certification process relate to its effectiveness, flexibility, and costing. The Smart digital tools are expected to benefit both MFIs and their clients, and to play a crucial role in increasing client protection awareness.

Moses MUSANTU continued by stating that it is critical that regulators and policy-makers are involved in developing tools, as they critically observe client protection elements. Client protection principles are increasingly reflected in market performance, and in the offering of knowledge products for disclosure and transparency to regulators. Capacity building for regulators is much needed to embed a consumer-centric approach in the regulatory landscape. Musantu welcomed the three-tiered approach as he expects that it will help regulators to monitor and evaluate SPIs.


In response to a question from the audience concerning the external assessment of SPM practices of FSPs via social ratings, Foose responded that SPTF still very much encourages organisations to do the full social rating in line with the Universal Standards for Social Performance Management; this evaluates all the client protection practices as well as important governance indicators.  She referred to the importance of the CP Pathway work to evaluate the ‘do no harm’ aspects. She also emphasised that social ratings may be more relevant for impact investors who are looking for more information on the positive value created for clients, and not just the ‘do no harm’ aspects.

Emmanuelle JAVOY added that equity and debt investors can play a role in incentivising institutions to pursue client protection certification for their annual audited statements.

When asked about who is qualified to do external evaluations, Moauro referred to independent certifiers from rating agencies, recognised by Smart to ensure that the quality of the certification is based on independency with no conflict of interest.

The session was concluded by acknowledging that it is critical to involve a wide range of stakeholders, including raters and investors, in the development and implementation of new client protection mechanisms. These should put clients at the centre of every decision. In the next phase, focus should be on demonstrating progress in evaluation of the products, strengthening of FSPs, and better client protection practices.