Understanding products and how they are offered to ultimate clients is essential part of the due diligence process. This includes but it is not limited to clients visits or pricing anaylsis breakdown. This is systematically reviewed by analysts and is presented to the Investment Committee in their dossiers. Where provided, the Client Protection ALINUS is also reviewed, which has a particular component on responsible pricing.

During production of our social performance report this year, we have aggregated data on average interest rates charged by MFIs and then see how this translates into costs. When this exercise was previously performed, MFIs were making an average of -0.5% loss, now they are making an average of a 1% profit. This very modest level of profitability helps to provide reassurance in that appropriate pricing is used,.

Understanding products and how they are offered to ultimate clients is essential part of the due diligence process. Analysts will enquire about this in their DD missions and also try to gauge clients understanding on these matters. They systematically spend time visiting clients and ask about their knowledge of products. They also shadow loan officers at work. This is presented to the Investment Committee. The results of this are also captured in the ALINUS.