Thank You Mr Srinivasan for your inputs.
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Each country has not more than 5-6 rating agencies. Due to the extremely constrained supply, they charge ~$5-$10,000 per MFI rating. Due to this obscenely high prohibitive cost, most MFIs anyway skip ratings. So instead of spending $10,000 every 4 years on a paid rating, VolunteeRate research indicates MFIs will find it prudent to seek a VolunteeRate annually.
Banks and Equity Investors anyway rely on undertaking a due diligence and a rating, particularly for small and non-profit MFIs, is not mandatory but always good to have.
VolunteeRate will have to earn credibility through strict reliance on process, methodology and a cent percent objective rating methodology. A country level rating committee, again made up of Volunteers (Seniors Microfinance and Risk Practitioners) will award the final rating.
It is well known that global rating agencies partly seeded the global financial crisis of 2009 by constantly awarding AAA to dubious securities. So what credibility of established rating agencies (often characterized by perennial client-agency conflict of interest) are we talking about ?
Open, Objective, Free, Fair.
Sincerely,
Anjali
On Thu, Mar 14, 2013 at 6:41 PM, N. Srinivasan <shrin54@yahoo.co.in> wrote:
The issue is not just about low-cost or free ratings. The acceptability of these ratings to lending banks and the country regulator is a critical concern. In India only rating agencies accredited by the Central bank do the rating which can be relied upon by banks for any loan in excess of about one million USD. While MFI staff can learn some useful skills, the rating done by VolunteeRate may not be useful in satisfying banks for funding decisions.RegardsSrinivasan
From: Anjali Kapoor <anjali@theflatpyramid.com>
To: MicrofinancePractice@yahoogroups.com
Sent: Thursday, 14 March 2013 1:41 PM
Subject: [MFP] VolunteeRate - Open, Objective & Free Ratings for MFIs by (Trained) Volunteers
Dear Practitioners,VolunteeRate is a global initiative to offer open, objective and free ratings to MFIs by micro finance practitioners or mainstream finance professionals who successfully undergo a fortnight of online comprehensive modular self certification training in rating methodology.We believe current ratings are expensive (~$5000-$10,000), particularly for small, non-profit & community development MFIs. Moreover, due to the perennial client-agency relationship, there is and will always be a conflict of interest.
VolunteeRate is evolving and we are excited to seek feedback and continuously improve.
We are 'Live' in India and are actively seeking individual/institutional partners to champion VolunteeRate on other continents.Visit us at www.volunteerate.com--Anjali Kapoor | The Flat Pyramid | Access of All, For All |
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Anjali Kapoor | The Flat Pyramid | Access of All, For All |
| E: anjali@theflatpyramid.com | www.theflatpyramid.com
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