According to a recent press release by Marketwire, Kiva.org, known as the first person-to-person online microfinancing website, plans to partner with Moody’s Corporation to provide pro bono credit ratings of partner microfinance institutions (MFIs), risk management training for staff, and financial support to expand its partnership with MFIs. [1]
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MICROCAPITAL STORY: SME Rating Agency of India Limited (SMERA) Launches Ratings for Microfinance Institutions
SME Rating Agency of India Limited (SMERA), a joint initiative of the Small Industries Development Bank of India, Dun & Bradstreet Inc., and several public and private sector banks, has launched a rating service for microfinance institutions (MFIs). SMERA-MFI Rating is an independent agency that will assess the financial and social performance of MFIs in India.
MICROCAPITAL STORY: Microfinance firms in the Philippines take to ratings
In a recent report by Paolo Luis G. Montecillo in the Business World in the Philippines, it was observed that microfinance institutions in the Philippines have started to approach international rating firms with the hope that independent ratings will attract foreign investments and improve institutional operations. The president and chairman of Rural Green Bank of Caraga, Joseph Omar O. Andaya, noted that the bank was able to obtain a million-peso loan after securing a rating from Milan-based Microfinanza Rating. In addition, the assessment by Microfinanza Rating allowed Mr. Andaya to learn about institutional strengths and weaknesses of his institution, the latter of which included high operating costs and inefficient operations. Rural Green Bank is now in discussions with Blue Orchard Microfinance Investment Managers, a Switzerland-based fund, in relation to a loan for an amount almost equivalent to a quarter of its 1.6-billion peso loan portfolio. The Green Bank was established in 1975 and has a 4-diamond rating on the MIX Market portal. It does not appear to have submitted updated information for 2008. However, latest figures on the MIX Market portal show that Green Bank has a gross loan portfolio of USD 30,524,872 and 72,742 active borrowers as at 31 December 2007. Green Bank’s key sources of funding are loans, savings and shareholder capital.
NEWS WIRE: The Philippines: Microfinance Institutions Embrace Ratings
Source: BusinessWorld (The Philippines).
MICROCAPITAL STORY: Inter-American Development Bank’s Multilateral Investment Fund (MIF) and Corporation Andina de Fomento (CAF) Back Ratings For Microfinance Institutions
The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) and Corporacion Andina de Fomento (CAF) have announced they will support a project to assist small-scale microfinance institutions (MFIs) in Latin America and the Carribbean obtain credit risk ratings and performance assessments. The new project will give priority to MFIs with loan portfolios between USD 1 million and USD 15 million, with average loans not exceeding USD 3,000. The MIF and CAF will help cover part of the cost of the credit risk ratings and performance assessments: the MIF will provide a grant of USD 986,161, CAF will provide USD 200,000 and participating MFIs will provide USD 400,000.
MICROCAPITAL STORY: VG Microfinance – Invest Nr. 1 GmbH’s senior CDO notes downgraded by Fitch Ratings from ‘BBB’ to ‘BB+’ (assigned a Negative Outlook) with Deutsche Bank AG in its role as seller and protection buyer
Fitch has confirmed a downgrade of VG Microfinance – Invest Nr. 1 GmbH’s senior CDO notes to ‘BB+’ and assigned a Negative Outlook. According to Fitch, the downgrade of the senior CDO notes is the result of the rating agency’s concern for the political uncertainty and sharp asset deterioration of the Nicaraguan MFI, Asociación de Consultores para el Desarrollo de la Pequeña, Mediana y Microempresa (ACODEP’s) loan book. ACODEP currently represents 8.8 percent of the portfolio with default risks that have materially increased.
MICROCAPTIAL STORY: Fitch Ratings Confirms Long Term Rating of BB+ for AccessBank in Azerbaijan
Fitch Ratings has confirmed the long-term issuer default rating of ‘BB+’ with a Stable Outlook, short-term issuer default rating of ‘B’, and individual rating of ‘D/E’ for AccessBank of Azerbaijan, a for-profit microfinance institution.
PAPER WRAP-UP: Fitch Ratings Report: Microfinance – Testing its Resilience to the Global Financial Crisis by Sandra Hamilton
Written by a team of Fitch Ratings analysts led by Sandra Hamilton, “Microfinance Sector – Testing its Resilience to the Global Financial Crisis, (January 22, 2009),” is a follow up to Fitch’s June 2008 report, “The Microfinance Sector: its Success Could be its Biggest Risk.” The report looks at the extent to which MFIs are immune to, or insulated from, the global financial crisis. The June 2008 report highlighted the growing integration of the microfinance industry into the global financial system. Fitch finds evidence of a positive relationship between the size and level of integration of an MFI and the impact that the financial crisis is having on its business plan, performance, and asset quality. Fitch outlines the dual impact that the crisis will have on MFIs: a funding or liquidity impact and an economic impact.
PRESS RELEASE: MicroFinanza Rating of Italy Ups Credit and Social Ratings of Microfinance Institutions in Latin America, Asia and Eastern Europe
Source: MicroFinanza Rating.
MICROCAPITAL STORY: MicroRate Publishes Public Ratings of Microfinance Institutions Conducted Between January and September 2008
Forprofit microfinance rating company MicroRate has announced the completion of the following public microfinance institution ratings between January 2008 and September 2008:
MICROFINANCE PAPER WRAP-UP: “The Microfinance Sector: Its Success Could be its Biggest Risk”, Fitch Ratings
MICROFINANCE PAPER WRAP-UP: “The Microfinance Sector: Its Success Could be its Biggest Risk”, Fitch Ratings
Produced by Fitch Ratings, June 2008, 20 pages, available at: http://microfinancegateway.org/files/49914_file_Microfinance_Success_Could_Be_its_Biggest_Risk1206.pdf
This paper presents what Fitch Ratings believes to be the key risk factors of commercial microfinance. While the title of the report suggests that the paper presents risk factors directly associated with the sector’s rapid growth, the report actually includes a wide array of perceived risks that may not necessarily be a result from the sector’s success. Below are summaries of the risk factors that Fitch seems most concerned with in its report. For the complete report containing all risk factors, please click here.
MICROCAPITAL STORY: Fitch Ratings Assigns the Micro Finance Bank of Azerbaijan (MFBA) a Grade of BB+
MICROCAPITAL STORY: EDA Rural Systems Deploys Micro-Credit Ratings International Ltd (M-CRIL) Executives to Found Social Enterprise Price Discovery Platform CapitalConnect
Founded by EDA Rural Systems (EDA), CapitalConnect (CC) is a new information dissemination and price discovery platform for social enterprise transactions. CC aims to facilitate loans and equity investments by helping institutional lenders, institutional investors and social enterprises find one another. It is not a stock exchange, but provides a common platform for institutional players to interact, potentially resulting in more-realistic market valuations. Participants complete their transactions outside the portal. The service is not currently open to small-scale individual investors.
PRESS RELEASE: Planet Rating Begins Charging Public to Access Ratings of Microfinance Institutions
Rating reports are for sale as of January 7, 2008
MICROCAPITAL STORY: SPEED Ghana Launches a Ratings Service for Local Microfinance Institutions With Support from GTZ and DANIDA
Support Programme for Enterprise Employment and Development (SPEED), a Ghanian NGO that provides technical assistance and development services to microfinance institutions (MFIs), has introduced a ratings service for smaller financial institutions in Ghana. The initiative has been supported by GTZ, Deutsche Gesellschaft für Technische Zusammenarbeit GmbH, the international sustainable development enterprise owned by the German federal government, and DANIDA, the Danish International Development Agency.
MICROCAPITAL STORY: Standard & Poor’s Ratings Services Release Recommendations for Standardized Rating System of Microfinance Institutions
Standard & Poor’s (S&P), the largest global provider of financial market intelligence, announces the release of a publication aiming to provide a consistent framework for mainstream investors to make better informed decisions in microfinance. The report, entitled “Microfinance: Taking Root in the Global Capital Markets,” is a global initiative that will allow microfinance institutions (MFIs) gain greater access to capital markets. “The lack of consistent metrics for analyzing MFIs has hindered investment at a time when microfinance is growing at a significant rate,” said Cynthia Stone, Managing Director and chair of the Emerging Markets Council, Standard & Poor’s, as reported at Earthtimes.org. “And despite the level of interest, mainstream investors need standard metrics before they can invest in this particular sector."
2007 List of Microbank Ratings Published by the Rating Fund
The following institutions’ rating reports have been added to the Rating Fund Website since beginning of January 2007:
– Fondo 5 de Mayo, Mexico by Micorate åö June 2006
– UCEC Pala, Tchad by PlanetRating - October 2006
– SKDRDP, India by CRISIL - January 2007
– Mahasemam Trust , India by M-CRIL - December 2006
– ProMujer Mexico by Microrate - June 2006
– Insotec, Ecuador by Microfinanza - September 2006
– Fundamic Ecuador by PlanetRating - November 2006
– FDD, Dominican Republic by Fitch Ratings åö October 2006
– FDD, Dominican Republic by Microrateåö October 2006
– FADES Bolivia by PlanetRating - July 2006
– FADES Bolivia by Fitch Ratings- December 2006
– Fundacion Alternativa, Ecuador by Microfinanza - September 2006
– CACSMM, Peru by PlanetRating - December 2006
– Banco PyME BHD, Dominican Republic by Fitch Ratings åö December 2006
You can sign up to receive the above email alert about newly published ratings by sending an email to info@ratingfund.org. The Rating Fund is a fund that subsidies performance ratings of microbanks. The fund is managed by ADA in Luxembourg, a non-profit supporting microfinance worldwide.
SPECIAL REPORT: Looking Back to Plan Ahead – The Year of AFISAR
AFISAR© (the Agents for Impact Sustainability Alignment Rating) builds trust and credibility in the microfinance sector. With our partners, we engage in an active rating process, inspiring discussion and increasing awareness and understanding of the UN’s SDGs and environmental, social and governance (ESG) factors, taking a deep dive into the potential of finance to transform people’s lives, especially the lives of members of vulnerable groups. Placing active dialogue at the centre of the AFISAR© rating process, we address sustainability with strategic decision-makers and support our partners to further align their operations to the SDGs.
Having clocked five years of rating experience, culminating with the Year of AFISAR© in 2022, we would like to share some reflections:
Local presence is key Our rating team has grown bigger and stronger: we have a new colleague, Abhinav Soni, who is based in