Thursday, April 18, 2013

[MFP] MicroRate White paper- MFI Tier Definitions

 

Dear Colleagues,

 

MicroRate has just released a white paper defining MFI tiers.  To download this paper, go to: http://www.microrate.com/downloads/86 .

 

Historically, the microfinance industry referenced a system of three or four "tiers" to differentiate between MFI types.  However, previous tier definitions – often vague or based only on one indicator such as size – failed to adequately capture an MFI’s level of institutional development.

 

The tier system proposed is based on a three-tier structure that applies three simple, objective indicators that, together, act as proxies for MFI maturity. The three indicators are sustainability (return on assets, RoA), size (total assets in U.S. dollars) and transparency (level of regulation/reporting).

 

MicroRate is grateful to all of those who provided feedback on this tier system.  In particular, the e-MFP Action Group of Investors in Tier 2/3 MFIs  was very supportive in giving feedback and helping to disseminate this work. 

 

Best regards,

Becca Spradlin

 

Rebecca Spradlin
VP of Programs | MicroRate Inc.
becca@microrate.com | www.microrate.com
1.703.243.5340 ext. 12 | becca.waskey (skype)

 

 

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