The Microfinance Rating Outlook Report 2008
This report provides an overview of the MFI rating market as at the end of 2007. It is based on data collected directly from rating agencies.
The microfinance rating market saw demand growth in 2007. Over 1000 MFIs underwent a rating between 1997 and 2007, and the microfinance rating market has developed into a self-sufficient and mature market in certain countries. However, this growth is not harmonious across regions. Trends identified include:
- Increasing levels of private investment in the microfinance industry;
- Pressure from MFI stakeholders for more transparency and better governance, resulting in market growth;
- Knock on effect in terms of demand for microfinance ratings compared with demand for credit rating;
- Shift among mature MFIs from specialized rating products to mainstream credit ratings;
- Geographical expansion, activities consolidation and product diversification among specialized microfinance rating agencies;
- Development of social performance evaluation.
The report states that the growing interest of private investors is financially profitable for the sector and aids its sustainability. Microfinance players, however, should not lose sight of their social mission. Social performance evaluation represents a future growth area for specialized agencies.
