Rating Tools

There are two main tools that rate MFI’s social performance: the Microfinance Institutional Rating and the Social Rating.

Microfinance Institutional Rating. Microfinance Institutional Ratings are conducted by external assessors and provide an opinion on the long-term viability and creditworthiness of an MFI. The evaluation includes analysis of an MFIs “responsible practices,” which assess an institution’s client protection practices, responsible performance and mission alignment with these goals. The MIR also includes analysis of governance, financial profile, the microfinance environment and operational risks.

Social Rating. Social ratings are conducted by an external organization and provide an objective opinion on an MFI’s degree of success in translating its mission into practice.  To reach that opinion, raters analyze an MFI’s country context, social performance management, client protection, depth of outreach, quality of services and outcomes. As of now, different rating agencies use different rating systems. The Social Rating Guide provides a general comparison of each agencies’ rating grades.

Social Rating Guide

The audiences for social ratings and MIRs are external.  The rater does not provide recommendations for improving practice, but reviews documents and assigns a rating based on its findings.  One important use for social ratings is to verify data that were self-reported to MIX Market.  A good rating may also attract interest from investors and donors.

Below is a list of the rating agencies which offer MIRs and social ratings currently available:

Microfinance Institutional Rating

Social Rating

These four rating agencies are also part of the Rating Initiative, a program started by ADA to promote the establishment of a sustainable microfinance rating market. The Initiative’s activities include co-funding ratings for MFIs and educating investors about the different rating products.