Project
 
2019 - 2019


Nicaragua:

Client Protection Principle Assessment of a non-banking financing company in Nicaragua

Key Staff:

Danny Smith


The Netherlands Development Finance Company (“FMO”) and the non-banking financing company (“NBFC”) of one of Nicaragua’s largest coffee exporters in Nicaragua (“The Client”) required the services of a team to conduct a Client Protection Principle Assessment. The client finances coffee producers via short-term loans for fertilizer, labor and general working capital as well as medium-term loans for farm renovation and planting of new trees, while repayment comes from coffee deliveries to the client.

The objective of this project was to get an in-depth diagnostic of the client protection practices and policies of the lending process, as well as a set of recommendations and an action plan for the financing company. This in turn to ensure transparent, respectful and prudent financial services for these farmers thereby helping increase customer loyalty, secure coffee deliveries, reduce risks and improve the sustainability of the whole value chain.

In order to fulfil this main objective, the team executed an external assessment of the financing model of the non-banking finance company using the official Smart Campaign methodology, covering seven key principles:

  1. Appropriate product design and delivery
  2. Prevention of over-indebtedness
  3. Transparency
  4. Responsible pricing
  5. Fair and respectful treatment of clients
  6. Privacy of client
  7. Mechanisms for complaint resolution.

Value and Benefits:

LTS brought a sustainable commodities perspective to the assessment to complement the deep microfinance knowledge of the lead consultant/assessor, thereby helping to contextualise and adapt the findings for both the Client and FMO.



Services:




Practices:




Geography: Nicaragua

Date: 2019

Keywords:
 
 


Encouraging to hear of the UK Government's intention to unlock climate benefits and protect biodiversity in future… https://t.co/cvg3MBp9BO
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