auditor during the visit to the actual product in the market product dataset using the commercial name of the product when available. Although auditors were instructed to gather the commercial name during their visits, the staff failed to provide it in more than half of the visits. For visits without recorded product commercial name matching was done based on other product attributes like the type of savings account (transaction vs. investment), the interest rate quoted, and the presence of several fees. Even when a product offered was found in the market products dataset, the match could not sometimes be used because the market products dataset contained missing terms for the product. The resulting sample of matched products consists of 215 savings and 261 credit products.<sup>27</sup> From the different product terms collected (see Footnote 26) not all are equally relevant or important, because they may not apply or may not be charged. For this reason we develop a “transparency index” that reflects the disclosed cost as a percentage of the total (annual) cost of the product. The index ranges between 0 and 100 percent, where 0 percent indicates that no information about the cost of the product is disclosed and 100 percent means that the full cost of the product is disclosed. The index is thus a ratio where the numerator is the sum of product-relevant costs disclosed by the staff and the denominator is the total cost of the product. For example, if a savings product has a monthly management fee, then the annualized cost will be included in the denominator and will appear in the numerator if the staff mentioned it.<sup>28</sup> Because the total cost may include usage fees, we compute the transparency index with the usage profile suggested by the regulator and already used in Table 1. The transparency index is reported for all costs disclosed orally as well as the costs disclosed voluntarily by the staff, that is, those costs that were not prompted by the auditor. The transparency index is also computed for the printed materials, such as brochures and amortization tables given to the auditors during the visit.

In addition to the information provided we assess the cost of the product offered and compare it to other similar products offered by the same institution. We compute the total costs and earnings without usage fees, using the formulas for total annual cost and total annual earnings (APR and APY), and with usage fees under the profiles of Table 1.

# **6. Empirical Strategy and Results**

> (3) membership cost; (4) credit acquisition costs; (5) management / administration fee; (6) late payment and (7) early payment fee.

> 27 Because the same product could be matched to that offered to different auditors visiting the same institution, the number of matched credit products is larger than the number of products with complete information. By country, 88.4 percent of savings products and all the credit products in Peru were matched, 69.6 percent of the savings and 48.7 percent of the credit products in Mexico were matched and 18.1 percent of the savings and 33.5 percent of the credit products in Ghana were matched. 28 In this example, if there was no management fee, then it would not appear in the numerator or denominator although the staff could have mentioned that such a fee was not assessed.

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