Fitch Ratings Criteria Report, Analysts; Jose Castro Valdes, Juan Pablo Gil L, Greg Kabance, and Sam Fox
This paper is a response to growing interest in the securitization of microfinance transactions, and although it specifically addresses this in a Bolivian context, it acts as a useful yardstick for rating methodology elsewhere and provides a comprehensive summary of this process. The authors begin with the ‘rating rationale’ which addresses the approach to rating structured transactions in microfinance, an industry which by its nature means the relationship between a loan originator and borrower is paramount. Because of this it is difficult to remove the risk of the underlying originator from any transaction, so any rating is closely linked to the credit quality of the loan servicer.
Continue reading “PAPER WRAP-UP: “Rating Methodology for Bolivian Microfinance Clients””
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