Incorporating Consumer Research into Consumer Protection Policy Making

This Focus Note describes CGAP's experience to date gathering qualitative and quantitative information directly from low-income consumers to inform financial consumer protection policy--which financial services they use, how they choose among them, problems they experience, and perceptions of their rights and responsibilities. The use of consumer experiences to inform financial consumer protection can improve policy making by better accounting for the situation of consumers, including those with lower levels of income, education, and familiarity with formal financial products. (See Box 1.) In particular, low-income consumers often use different financial products and providers than the mainstream market, have limited formal financial experience, and may be socially marginalized--making them less likely to advocate on their own behalf or to seek recourse. Furthermore, many regulators and supervisors may have only limited experience with low-income consumers or semiformal and informal providers, and the approaches and best practices for financial consumer protection taken from more developed countries may not work without significant modification. This situation calls for direct consumer research with these consumer segments, to inform policy makers to better incorporate the needs and experiences of low-income and inexperienced financial consumers into consumer protection policy.

This paper describes three different consumer research methodologies CGAP has field tested--consumer group discussions, in-depth individual interviews, and quantitative surveys--and the lessons learned to date on using consumer tools to inform consumer protection policy making.