MICROCAPITAL BRIEF: Moody’s Analytics, Microfinance Centre (MFC) Partner to Launch Social Performance Assessment (SPA) in Europe, Central Asia

Moody’s Analytics, a unit of US-based Moody’s Corporation that aims to help capital markets and credit risk professionals respond to market changes, and the Microfinance Centre (MFC), a Poland-based microfinance resource center, recently partnered to launch Moody’s Analytics Social Performance Assessment (SPA), a tool that analyzes the performance of microfinance institutions and operations, in Europe and Central Asia. According to Katarzyna Pawlak, Deputy Director of MFC, which will deliver the service, SPA will enable “organizations to track and compare performance, which will help bring needed attention of social investors to the sector.”

SPA uses a ranking scale ranging from SP1, which is the highest grade, to the lowest, SP5. A grade of SP1 indicates that the “MFI’s infrastructure and processes are consistent with a high likelihood of operating in the best interest of its customers, and that the risk of causing adverse effects to its customers and other investors are very low. It also must operate well in order to accomplish its social mission, perform well environmentally, have well established and information systems, and maintain the highest standards in terms of customer over-indebtedness and debt collection practices.”

SPA was developed by Moody’s Analytics through market research and participation from approximately 100 MFIs, investors and service providers including the US-based Social Performance Task Force (SPTF), which promotes social values in microfinance; the Microfinance Information Exchange (MIX), a US-based nonprofit that delivers data, analysis, research and business information on institutions that provide financial services to poor people; and the Smart Campaign, a US-based initiative that promotes financial transparency and the ethical treatment of clients.

As of 2012, Moody’s Corporation reported total assets of USD 3.9 billion and annual revenue of USD 2.7 billion. MFC reported total assets of PLN 10 million (USD 3.14 million) for the year 2012.

By Adrija Vaiciulionis, Research Associate

About Moody’s Corporation:
Moody’s Corporation is a US-based financial services company. Moody’s Analytics, a unit of Moody’s Corporation, aids capital markets and credit risk professionals in adapting to changes and challenges in the business marketplace by offering tools, such as software and research, and expertise and advisory services for measuring and managing risk in credit analysis, market research and financial risk management. As of 2012, Moody’s Corporation reported total assets of USD 3.9 billion and annual revenue of USD 2.7 billion.

About the Microfinance Centre (MFC):
Based in Poland, the Microfinance Centre (MFC) for Central and Eastern Europe and the New Independent States is an international network of approximately 105 microfinance institutions (MFIs) that aims to promote a socially-oriented and sustainable microfinance sector. Its services include knowledge management, policy advocacy, research and development and assistance with technical services for the microfinance community. MFC reported total assets of PLN 10 million (USD 3.14 million) for the year 2012.

About Moody’s Analytics Social Performance Assessment (SPA):
Moody’s Analytics Social Performance Assessment (SPA) is an independent analysis of microfinance institutions’ (MFIs’) operations that provides investors and MFIs with evaluation of social performance, cross-communication of social performance between MFIs and investors, transparency and performance reports.

Sources and Additional Resources:

Microfinance Centre, “Microfinance Centre to Deliver Moody’s Analytics Social Performance Assessments,”
http://www.mfc.org.pl/en/content/microfinance-centre-deliver-moody%E2%80%99s-analytics-social-performance-assessments

MicroCapital Article, August 18, 2011, “MICROCAPITAL BRIEF: Microfinance Centre (MFC) for Central and Eastern Europe and the New Independent States’ “Financial Inclusion Program” Reaches 100,000 Low-Income Households in Eastern Europe, Central Asia,” https://www.microcapital.org/microcapital-brief-microfinance-centre-mfc-for-central-and-eastern-europe-and-the-new-independent-states%E2%80%99-%E2%80%9Cfinancial-education-program%E2%80%9D-reaches-100000-low-income-households/

MicroCapital Article, September 29, 2010, “MICROCAPITAL BRIEF: Moody’s Corporation Developing Standards for Assessing Social Performance of Microfinance Insitutions,” https://www.microcapital.org/microcapital-brief-moody%E2%80%99s-corporation-developing-standards-for-assessing-social-performance-of-microfinance-institutions/

MicroCapital Universe Profile: Moody’s Corporation
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Moody%27s+Corporation

MicroCapital Universe Profile: Microfinance Center (MFC)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Centre+for+Central+and+Eastern+Europe+and+the+New+Independent+States

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.

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