fsd's financial education programme: evaluation and ... - FSD Kenya

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22 • FSD’S FINANCIAL EDUCATION PROGRAMME: EVALUATION AND RECOMENDATIONS 4. CONDUCT OF THE WORK The project evaluation will be undertaken in close consultation with the Head of Future Financial Systems at FSD Kenya. The consultant will provided with full access to all the project reports. Some of these will need to be provided on a confidential basis and will be provided on a non-disclosure basis and will need to be returned at the conclusion of the exercise. To gain access to the pilot project implementation teams needed for consultation, the consultants must present a structured approach and agree on dates and times for consultation. Support in contacting the partner institutions will be provided by FSD. The consultant is expected to respond to these terms of reference with a clear budget and work plan. Initial findings will be presented to FSD for comment prior to final delivery of the final report. 5. OUTCOMES AND DELIVERABLES The overall desired outcome from this exercise is more effective work by FSD Kenya in improving the financial lives of low income households. There are four major deliverables required: (i) An initial report responding to the terms of reference detailing the proposed methodology and timetable for the assignment. (ii) A presentation of major findings to be made to the FSD Kenya project team. (iii) An internal report to FSD Kenya detailing all findings. This should be presented with an executive summary (max 2 pages), a main section (max 20 pages), references and necessary supporting analysis and material in annexes. (iv) A standard FSD project completion report in the format attached (annex A) The copyright for all material prepared under this terms of reference will pass to FSD Kenya. It is FSD’s practice to publish the reports it commissions in its own house style. There is therefore no requirement for material to be extensively formatted beyond that required to indicate how material should be logically presented in the final report. All final reports should be presented in an electronic format allowing the text and graphics to be manipulated in preparation for publication. Where a final report is presented in a portable document format (pdf) generated from another format (such as Microsoft Word) it should be accompanied by the original file from which it is generated. All representations of graphic material (tables, figures, drawings, charts, graphs and photographs) must be able to be reproduced at high print resolution. Tables, figures, drawings, charts, graphs should be provided in Microsoft Excel or Adobe Illustrator format. Photographs must be provided in high-resolution JPG images set to minimum of 300 dots per inch (dpi). Any technical questions regarding these requirements should be addressed to FSD’s Communications Officer. 6. REQUIREMENTS Mandatory requirements Table 10: FinEd project targets Strong understanding of financial education issues/literature Broad understanding of the Kenyan financial sector Track record in undertaking similar assignments/reviews of a similar nature Ability to work independently and deliver against deadlines
FSD’S FINANCIAL EDUCATION PROGRAMME: EVALUATION AND RECOMENDATIONS • 23 Annex B Defining financial capability and consumer protection Consumer protection 3 Consumer protection refers to the plethora of prudential and market conduct regulations which have as aim the stability of the sector and encouragement of fair and transparent practices by all types of financial service providers. It also refers to voluntary institutional or sector-level practices relating to issues such as fair pricing, truth in lending and transparent client communication. Consumer protection also encompasses consumer redress. This refers to an independent mechanism or set of mechanisms through which consumers can lodge complaints, incidences of unfair treatment or possible irregularities experienced in the market place. The intention is to have a framework in place which will minimise the use of the courts, as these are costly and time consuming to both parties and generally place the consumer – with limited resources and legal know-how – at a disadvantage. Such a consumer redress framework generally starts with (objective) consumer complaints procedures on institutional level, which may then be escalated by the consumer to a subsector or sector ombudsmen and/ or a consumer tribunal. A comprehensive consumer protection and redress framework will therefore aim at establishing a seamless process which deals with issues on a macro (e.g. general policies related to consumer protection and redress across all sectors; an efficient legal system); meso- (sector and sub-sector level policies as well as sub-sector initiatives from the private sector); and micro/institutional level. For example, an Ombudsmen Act may be required on macro level, to enable the establishment of one or more ombudsmen who deal with the financial (and other) sectors. Such a consumer protection and redress framework will naturally also have to work closely with any financial education initiative, as part of the latter would be to educate people on these mechanisms, and make them aware of their rights and responsibilities. An educated public will also be more assertive and prone to report irregularities in the market place. Financial education is therefore a pro-active manner in which to help safeguard the public against unfair treatment. In 2011, the G20, together with the OECD and the Financial Stability Board (FSB) developed a set of ten principles of financial consumer protection 4 . An excerpt is presented below: 1. Legal and supervisory framework: “Financial consumer protection should be an integral part of the legal, regulatory and supervisory framework and (these) should reflect the diversity of national circumstances and global market regulatory developments… Relevant non-governmental 3 Adapted from: National Financial Literacy and Consumer Protection Framework for Lesotho. 2011. Piprek, Gerda, L. – Marketworx Africa. 4 G20 High-level Principles on Financial Consumer Protection, OECD, October 2011. www.oecd.org stakeholders should be consulted when policies related to financial consumer protection and education are developed.” 2. Role of oversight bodies: “There should be oversight bodies (dedicated or not) explicitly responsible for financial consumer protection with the necessary authority to fulfil their mandates. They require …. operational independence and appropriate governance; accountability for their activities; adequate powers …. and clear and consistent regulatory processes.” 3. Equitable and fair treatment of consumer: “All financial consumers should be treated equitably, honestly and fairly at all stages of their relationship with financial service providers. Treating customers fairly should be an integral part of good governance and corporate culture of all financial service providers and authorised agents. Special attention should be dedicated to the needs of vulnerable groups.” 4. Disclosure and transparency: “Financial service providers and authorised agents should provide consumers with key information that informs the consumer of the fundamental benefits, risks and terms of the product. They should also provide information on conflicts of interest associated with the authorised agent through which the product is sold…….. Appropriate information should be provided at all stages of the relationship with the customer ….” 5. Financial education and awareness. “Financial education and awareness should be promoted by all relevant stakeholders and clear information on consumer protection, rights and responsibilities should be readily accessible by consumers…. Financial education should be encouraged as part of a wider financial consumer protection and education strategy.” 6. Responsible business conduct of financial service providers and authorised agents: “Financial service providers and authorised agents should have as an objective to work in the best interest of their customers and be responsible for upholding financial consumer protection. ….Financial service providers should assess the related financial capabilities, situation and needs of their customers before agreeing to provide them with a product, advice or service ….The remuneration structure for staff of both financial service providers and authorised agents should be designed to encourage responsible business conduct, fair treatment and to avoid conflicts of interest.” 7. Protection of consumer assets against fraud. “Relevant information, control and protection mechanisms should appropriately and with a high degree of certainty protect customers’ deposits, savings and other similar financial assets, including against fraud, misappropriation or other misuses. 8. Protection of consumer data and privacy. “Consumers’ financial and personal information should be protected through appropriate control and protection mechanisms. These mechanisms should define the purposes
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