Consumer protection diagnostic study - FSD Kenya

38 • CONSUMER PROTECTION DIAGNOSTIC STUDY: KENYA
Annex 1
IMPLICaTIOnS OF Key DIaGnOSTIC FInDInGS
anD ReCOMMenDaTIOnS FOR COnSUMeR
aWaReneSS anD FInanCIaL eDUCaTIOn
Consumer protection
objective
Disclosure and
transparency
Key
recommendations
Require by regulation
standardized credit
price disclosure across
all regulated service
providers – i.e., Total
Cost of Credit (TCC)
and Repayment
Schedule (RS), incl.
standard calculation
and disclosure
methods.
Disclosure of pricing,
terms and conditions
for non-credit
products.
“Plain language” and
standard contract
provisions for simple
products (e.g., IRA
ongoing project on
“standardisation of
policy wordings”).
Which providers
covered
Regulated service
providers (i.e., banks,
DMIs, SASRA SACCOs;
credit-only MFIs and
non SASRA SACCOs.
Regulated service
providers (i.e., banks,
DMIs, SASRA SACCOs);
credit-only MFIs and
non- SASRA SACCOs.
Regulated service
providers (i.e., banks,
DMIs, SASRA SACCOs);
- credit-only MFIs and
non- SASRA SACCOs.
Consumer
awareness needs
Public information
campaign using
multiple media
regarding right
to receive this
information (when,
how, format).
Public information
campaign regarding
the right to this
information, how
to use it, and the
importance of careful
product selection and
comparing pricing.
Public information
campaign re the right
to understand your
financial service and
the tools available
to do so pre contract
quotation, which can
be read out aloud and
also provided in the
local language.
Consumer
education needs
Outreach to
consumers through
multiple channels
using simple materials
and practical
techniques - regarding
understanding
and using TCC &
RS including for
comparison shopping.
Outreach to
consumers through
multiple channels
using simple
materials and
practical techniques
- how to be sure you
understand what you
are getting, how to
seek out good valuefor-money.
Multiple FinEd
Initiatives &
techniques to
help consumers
understand
agreements and use
the info for decisionmaking
(incl. taking
documents home to
study and seek advice
before signing).
Comments on
implementation
and roles
Providers are to
display and explain
this information
during credit process;
consumer hotline and
mystery shopping are
tools for monitoring
compliance; future
potential for central
repository and price
comparison service,
SMS communication
to consumers, etc.
Providers are required
to display and explain
this information. Use
of on-site inspection
by regulators,
consumer hotline and
mystery shopping to
monitor compliance.
Potential for
dissemination through
vernacular radio (like
agricultural prices).
Key fact documents
provided as cover
sheet on agreements
or through a precontract
quotation
to be signed by both
parties. Industry role
in developing effective
plain language and
standard contract
provisions is highly
desirable.