MICROCAPITAL BRIEF: MFR Releases Impact Assessment Rating Service for Microfinance Institutions

Microfinanza Rating (MFR), an Italy-based rating agency focusing on “inclusive and sustainable finance,” recently unveiled its Impact Assessment service, which it describes as offering “external, reliable and independent validation of the changes generated by the financial institution’s activities, in its clients’ li[ves].” The assessment uses indicators based on the UN Sustainable Development Goals as well as the work of the US-based, nonprofit Social Performance Task Force. Sample metrics include clients’ reported change in business revenue, household income, savings level and access to healthcare. The process results in a range of detailed data as well as a simple rating of 1 through 5 regarding the likelihood that the institution has made positive impacts on customers.

MFR started in 2000 as a department of Microfinanza Srl, an Italian consulting firm specialising in microfinance, and became an independent company in 2006. The firm’s clients mainly include investors, regulators and banks. In addition to its headquarters in Italy, MFR operates offices in Bolivia, Ecuador, Kenya, the Kyrgyz Republic, Mexico, Peru and the Philippines.

Microfinanza Srl provides education, research, technical assistance, and monitoring and evaluation services for microfinance providers. It is active in Africa, Eurasia and Latin America.

By Saulius Simonas Ramanauskas, Research Associate

Sources and Additional Sources

MFR press release
https://www.mf-rating.com/2022/05/27/mfr-launches-a-new-impact-assessment-product-2

MFR Impact Assessment methodology
https://www.mf-rating.com/wp-content/uploads/2019/07/Methodology-IA-MFR-ENG-Apr22.pdf

UN Sustainable Development Goals homepage
https://sdgs.un.org/goals

Social Performance Task Force homepage
https://sptf.info

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