The FINANCIAL — Against a backdrop of increasingly exploitative marketing campaigns and ads aggressively run by Georgian banks, ProCredit Bank was the first to initiate a campaign emphasizing the need to disclose detailed/genuine information about banking products to customers.
The aim of the so called Transparency Campaign is to raise awareness of banking services among the population with the key message that all associated fees and commissions should be crystal clear for borrowers and depositors to let them make more informed decisions.
As Maya Meredova, General Director of ProCredit Bank Georgia says, people are often misled by the banks’ attractive ads without really understanding all the conditions of the products and services advertised. “Frequently, the interest rates advertised for loans don’t include the commissions and the additional fees that a borrower will have to pay; so the client turns out to be deceived by the eye-catching ads,” added Ms. Meredova.
“With our Transparency Campaign we want to make sure that our existing and potential clients, general public and our young generation have detailed and comprehensive information about banking services, so that they can make more informed and responsible decisions when taking loans or making savings,” Ms. Meredova added.
“In Georgia, there is often the case of people signing loan agreements with a bank without even fully reading them. This leads them in to unfortunate situations such as unexpected costs and over indebtedness. That is why ProCredit Bank, as a socially responsible banking institution, felt the need to contribute to availability of information for users of banking services, and initiated this educational campaign, which should serve as an eye-opener for the population and prepare them for making the right decisions about using the products and services they really need. As well-informed customers become more careful about purchasing particular banking products, the banks will be forced to revise their marketing strategies,” Ms. Meredova said. “We want all of our clients to understand how much the services they use actually cost them, and if they find that they can’t afford to cover these costs, it’s better for them to refuse before things get complicated,” Ms. Meredova told The FINANCIAL.
Within the framework of the campaign a handbook was printed in Georgian and English languages. The handbook is written in simple language and contains all the necessary information about the most common banking services (loans, savings). It also highlights important aspects of bank contracts and, due to the increased public interest in Credit Info, the handbook has a separate section dedicated to it. The handbook is designed for private individuals but it will be useful for businesses too.
The Transparency Campaign will last for two months. It includes distribution of the handbook through ProCredit Bank’s extensive branch network as well as the Georgian printed media. As well as that educational lectures at the universities and information evenings for the clients of ProCredit Bank will be held throughout the campaign period.
The initiative is supported by the National Bank of Georgia. In the foreword of the handbook, the National Bank of Georgia, acknowledging the need for responsible approach of both banks and customers for sound and competitive financial markets, welcomed the initiative, adding that although the Georgian financial sector has been rapidly developing over the last years, the growth of financial literacy has been significantly lagging behind the growth of the complexity of the financial products; and such a deficiency of customer financial awareness represents a potential threat of abusive practices by financial service providers.
Both ProCredit Bank and the National Bank of Georgia (NBG) agree that the more transparent the decision making environment, the more stable the financial system and what’s more economic development is guaranteed.
According to Maya Meredova, ProCredit Bank’s customers usually like and welcome the Bank’s initiatives. “Our recently introduced Business Advisor service which is aimed at providing our business clients with the convenience of having a personal business advisor at the Bank, was well received by our business clients and they have been extensively using it,” she noted. “Therefore, we expect the Transparency Campaign to reach the general public, and we sincerely hope that people will use this handbook as a guide in dealing with banks.”
“The campaign is not something new for ProCredit Group which operates its banks in 21 countries but it is the first initiative of this kind in Georgia. We will see its outcome after two months as well as in the long term,” Meredova told The FINANCIAL.
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