Rating Fund

The Microfinance Rating and Assessment Fund is a joint initiative launched by the Inter-American Development Bank (IDB) and the Consultative Group to Assist the Poor (CGAP). The European Union (EU) subsequently joined the Rating Fund in January 2005.

The primary objectives of the Rating Fund are:

• Market-building for MFI rating and assessment services by encouraging greater demand from MFIs for professional external evaluations, as well as strengthening the quality of supply.

• Improved transparency of MFI financial performance, as a basis for improved performance and increased flow of commercial funding to MFIs.

The Rating Fund is based on the following principles:

• Transparency: Promote and facilitate the public disclosure of MFI performance information through the increased use of ratings and assessments.

• Availability of Information: Promote information-sharing to increase the amount of reliable information on MFI performance

• Quality of Information: Ensure that ratings and assessments financed by the Rating Fund contain enough information to enable investors to make informed decisions about MFI performance.

• Cost-Sharing/Value Realized: Require MFIs to bear an increasing portion of the cost of a rating or assessment so that they recognize the benefits of undertaking a rating exercise and build it into their normal business costs.

In December 2004, TSPI received funding support from the World Bank-sponsored Consultative Group to Assist the Poor (CGAP), composed of 29 donor agencies, to subject itself to an institutional rating by CRISIL, an international rating agency and a partner of the world’s largest rating agency, Standard & Poors. On a scale of 1 to 8, with 1 being the highest rating, TSPI receives a rating of 2 – reflecting “long track record, superior governance practices and robust systems, processes and control instituted by management.”

** To view TSPI’s final rating report, click [here]