The Rating Initiative, a program implemented to support and encourage the use of financial and social ratings in the microfinance sector, has released the “Microfinance Rating Market Review 2010”.
The review, which updates and builds on previous reports released between 2006 and 2008, provides an overview of the global and regional microfinance ratings sector between 2008 and 2009 by collating information provided by participating microfinance institutions (MFIs) and rating agencies. The ratings included in the review are categorized by type – financial vs social, funding source- MFI-funded vs subsidized, country, region, MFI and rating agency. The review also includes a qualitative assessment to highlight both the motivations and the difficulties that MFIs and rating agencies face during the ratings process. Online questionnaires and telephone interviews with MFIs and ratings agencies were used to collect the data for the qualitative analysis.
The Rating Initiative was launched by Appui au Développement Autonome (ADA) based in Luxembourg, in partnership with the government of Luxembourg, the Microfinance Initiative Liechtenstein (MIL), the Swiss Agency for Development and Cooperation (SDC), Oxfam Novib Fund (ONF), Oesterreichische Entwicklungsbank (OeEB), the Interchurch Organization for Development Co-operation (ICCO), the Principality of Monaco, BlueOrchard, responsibility Social Investments AG, the African Microfinance Transparency Forum (AMT) and the Social Performance Task Force (SPTF).
By: Medha Ravi, Research Associate
About The Rating Initiative:
Located in Luxembourg, the Rating Initiative was launched by Appui au Développement Autonome (ADA) in collaboration with the government of Luxembourg, the Microfinance Initiative Liechtenstein (MIL), the Swiss Agency for Development and Cooperation (SDC), Oxfam Novib Fund (ONF), Oesterreichische Entwicklungsbank (OeEB), the Interchurch Organization for Development Co-operation (ICCO), the Principality of Monaco and BlueOrchard. By researching and evaluating microfinance ratings, with a particular emphasis on social ratings, the Rating Initiative aims to improve the transparency of microfinance institutions (MFIs) for donors, investors and MFIs themselves. In some instances, the Rating Initiative also provides partial funding of rating and assessment services for MFIs.
About Appui au Développement Autonome (ADA):
Founded in 1994, Appui au Développement Autonome (ADA) is a nonprofit organization based in Luxembourg. ADA’s activities include developing new financial products, assisting in the capacity building of microfinance institutions (MFIs) and improving information on and awareness of microfinance activities. As of 2007, ADA manages an annual budget of approximately EUR 3 million (USD 4.4 million) and works with approximately 25 MFIs across 3 continents.
Source and Resources:
The Rating Initiative: “Microfinance Rating Market Review 2010”, http://www.ratinginitiative.org/index.php?id=28
MicroCapital Brief, February 18 2010: “MICROCAPITAL BRIEF: ADA (Appui au Développement Autonome) Launches First Issue of Discussion Paper Series”, https://www.microcapital.org/microcapital-brief-ada-appui-au-developpemen…
MicroCapital’s Microfinance Universe profile: The Rating Initiative, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=rat…
MicroCapital’s Microfinance Universe profile: Appui au Développement Autonome (ADA), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=App…
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