MicroRate, a US-based microfinance rating agency, recently announced the release of its sixth annual survey of microfinance investment vehicles (MIVs), “The State of Microfinance Investments 2011.” According to Sebastian von Stauffenberg, CEO of MicroRate, one of the highlights of the survey is, “the resilience of microfinance institutions in weathering the 2008/2009 economic crisis.” Sponsored by Canadian non-governmental organization Calmeadow, UK-based Citi Microfinance and the European Union’s European Investment Bank, the report was compiled from interviews with executives of 80 MIVs that hold aggregate assets of USD 6.4 billion. MicroRate estimates the total assets of all MIVs to be USD 7 billion as of December 31, 2010.
Other findings of the survey include: the economic crisis led to the lowest growth rate observed in the past six years, with total MIV assets growing 12 percent in 2010; some of the excess liquidity that was built up in 2009 was reduced from 15 percent as of December 2009 to 12 percent at the end of 2010; low-priced, domestic funding has been crowding out foreign private capital in some countries; Latin America & the Caribbean has received 35 percent of total MIV investments, becoming the second-place region, behind Europe and Central Asia, which received 38 percent; fund executives predict annual growth rates of 20 to 30 percent for the remainder of 2011 and into 2012; and microfinance institutions and MIVs are prioritizing social performance.
By Carol Kim, Research Associate
About MicroRate: MicroRate is a microfinance rating agency formally approved by CGAP (Consultative Group to Assist the Poor), the Inter-American Development Bank and Peru’s Superintendency of Banking, Insurance and Pension Fund Managers (SBS). It was founded in the US in 1997 with the intent to objectively evaluate microfinance institutions (MFIs), thereby increasing transparency and drive additional funding into microfinance. MicroRate has completed approximately 550 ratings of approximately 200 MFIs worldwide and claims to perform its evaluations not through “rigid rating formulas,” but through “evaluation of critical risk.” The private company is based in Washington, DC with offices in Peru and Morocco.
About Citi Microfinance: Citi Microfinance, created in 2005 as part of US-based Citibank, is engaged with approximately 100 microfinance institutions (MFIs), networks and investors in 40 countries. It aims to expand the range and reach of financial services available to poor people by offering products and services including financing, access to capital markets, transaction services, hedging foreign exchange risk, credit, savings, remittances and insurance.
About European Investment Bank: The European Investment Bank (EIB) was created in 1958 as the long-term lending bank of the European Union. In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises. In 2010, the EIB approved projects with a total value of USD 110 billion. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.”
Sources and Additional Resources:
MicroRate Press Release: “MicroRate Releases ‘The State of Microfinance Investment 2011’”, August 2011, http://microrate.com/wp-content/uploads/2011/08/Press-release-MicroRate_State-of-Microfinance-Investment-20111.pdf
MicroRate: “The State of Microfinance Investment 2011” Report, http://microrate.com/wp-content/uploads/2011/08/MicroRate_The_State_of_Microfinance_Investment_20111.pdf
MicroCapital.org: “MICROCAPITAL BRIEF: MicroRate Latin America Approved as Microfinance Rating Agency in Peru, Celebrates 14th Anniversary”, August 3, 2011 https://www.microcapital.org/microcapital-brief-microrate-latin-america-approved-as-microfinance-rating-agency-in-peru-celebrates-14th-anniversary/
MicroCapital.org: “MICROCAPITAL BRIEF: MicroRate Releases 5th Annual Survey: “State of Microfinance Investment: The MicroRate 2010 Microfinance Investment Vehicle (MIV) Survey””, July 26, 2010 https://www.microcapital.org/microcapital-brief-microrate-releases-5th-annual-survey-state-of-microfinance-investment-the-microrate-2010-microfinance-investment-vehicle-miv-survey/
MicroCapital’s Universe Profile: MicroRate, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MicroRate
MicroCapital’s Universe Profile: Citi Microfinance, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Citi+Microfinance
MicroCapital’s Universe Profile: European Investment Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Investment+Bank+%28EIB%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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