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February 16, 2012
Principles for Investors in Inclusive Finance Publishes Compendium of Case Studies
    by Robert Kropp

The Principles for Investors in Inclusive Finance wraps up its first year with case studies designed to help provide sustainable financial products and services to the world's poor.

The United Nations' Principles for Responsible Investment (PRI) helped establish the Principles for Investors in Inclusive Finance (PIIF) in January, 2011, as a means of expanding access to affordable and responsible financial products and services by poor and vulnerable populations. As an initiative of investors, the Principles were established to meet the demand for investor guidance in sustainable investment in inclusive finance.

The seven Principles address range of services, client protection, fair treatment, responsible investment, transparency, balanced returns, and collaboration on standards for the inclusive finance industry.

PIIF has marked its first year of existence with the publication of compendium of nine case studies in inclusive finance.

Retail providers of microcredit and other inclusive finance products currently serve about 200 million people. However, the need for such services is far greater: "it is estimated that of the world's 7 billion population, 2.7 billion adults do not have access to financial services," according to the report.

As the demand of inclusive finance grows to meet the needs of so many people, the necessity for protecting often vulnerable clients increases as well. A recent example of unsustainable practices by microfinance institutions (MFIs) occurred in India in 2010, when charges of unsustainable interest rates and overly aggressive collections practices led to a confrontation between MFIs and the government of the Indian state of Andhra Pradesh.

"Issues such as over-indebtedness are material when assessing financial risks and returns," Marilou van Golstein Brouwers, chair of PIIF's steering committee, stated in an overview included in the report.

Retail providers of inclusive finance products and services are encouraged to sign on to the Client Protection Principles, which call for prevention of over-indebtedness and fair and respectful treatment of clients.

US-based signatories to the Principles include the Calvert Foundation, Pax World Management, and TIAA-CREF.

PIIF's first anniversary will be celebrated today at the Social Performance Task Force's Social Investor Roundtable.


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