MICROCAPITAL BRIEF: Indian Investor in Microfinance, IFMR Capital, Receives “LA-” Rating from Rating Agency ICRA

ICRA, an Indian rating agency, recently awarded, an “LA-” rating to the long-term bonds program of Indian investment company IFMR Capital, which finances institutions in sectors such as rural and urban financial services.

The rating indicates that the bonds carry “average credit risk”. ICRA comments that the company has “a good governance structure and an experienced management team”, but notes concerns regarding the MFI’s “exposure to small and medium sized marginal credit profile MFIs [microfinance institutions], investments in subordinated tranches and a lack of track record”.

IFMR Capital does not report data to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, and further financial information on the organization is unavailable.

About IFMR Capital:
IFMR Capital, previously known as IFMR Trust Guarantee Company, is a non-banking finance company based in Chennai, India. It aims to provide access to capital for institutions in sectors such as rural and urban financial services, municipalities, rural small and medium-enterprises, rural infrastructure and agriculture.

About ICRA:
Formerly known as the Investment and Credit Rating Agency of India Limited, ICRA Limited was established in 1991 through the collaboration of commercial banks, investment companies and financial services institutions. It is a public, limited company with its shares listed on the Bombay Stock Exchange and the National Stock Exchange of India. Its largest shareholder is Moody’s Investors Service of the US.

By Trevor Kwong, Research Assistant

Sources and Additional Resources:
[1] Source: ICRA Rating Profiles: IFMR Capital:
http://www.icra.in/Files/Reports/Rationale/IFMR-20101110.pdf

[2] MicroCapital Universe: IFMR Capital:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=IFMR+Capital

[3] MicroCapital Universe: ICRA:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ICRA

[4] ICRA: Rating Scales:
http://www.icra.in/Files/Content/RatingsScale-2008.pdf

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