The performance of rated microfinance institutions in South Asia

Sinha, Sanjay

doi:10.3362/0957-1329.2002.018

Cited by 5 publications

(8 citation statements)

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“…We do not report separate results for CRISIL because the number of observations available for this agency is too low. Lack of efficiency is often considered a major challenge for MFIs (see, for example, Fitch Ratings, 2008;Sinha, 2002). Consistent with the pooled sample analysis, neither solvency nor social performance appears to be statistically associated with the ratings.…”

Section: Agency-specific Determinants Of Mfi Ratingsmentioning

confidence: 79%

“…Thus, performance assessment ratings are supposedly much more extensive than pure credit-risk ratings. Sinha (2002) states that many MFI operations are a "black box" and that this creates questions about their performance. Reille et al (2002) provide a thorough description of the assessment methodologies used with MFIs.…”

Section: Theoretical Background Hypotheses and Research Designmentioning

confidence: 99%

“…One should expect that ratings that are supposed to measure how well MFIs are functioning (i.e., the degree to which they fulfill their objectives) reflect MFI operational efficiency. Lack of efficiency is often considered a major challenge for MFIs (see, for example, Fitch Ratings, 2008;Sinha, 2002). If the relationship between the assigned ratings and MFI efficiency is not clear-cut, one risks that MFIs do not improve efficiency levels because a high degree of efficiency is not required for them to receive a good rating.…”

Section: Agency-specific Determinants Of Mfi Ratingsmentioning

confidence: 99%

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An Analysis of the Drivers of Microfinance Rating Assessments

Beisland

Mersland

2012

Nonprofit and Voluntary Sector Quarterly

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Rating assessments of microfinance institutions (MFIs) are claimed to measure a combination of creditworthiness, trustworthiness, and excellence in microfinance. Using a global data set covering reports from 304 microfinance institutions, this study suggests that these ratings are mainly driven by size, profitability, and risk. The overall results suggest that microfinance ratings convey information similar to that communicated by traditional credit ratings. All results are remarkably consistent across rating agencies. The determinants of the rating grades are found to be the same in all subsamples.

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Section: Agency-specific Determinants Of Mfi Ratingsmentioning

confidence: 79%

Section: Theoretical Background Hypotheses and Research Designmentioning

confidence: 99%

Section: Agency-specific Determinants Of Mfi Ratingsmentioning

confidence: 99%

See 1 more Smart Citation

An Analysis of the Drivers of Microfinance Rating Assessments

Beisland

Mersland

2012

Nonprofit and Voluntary Sector Quarterly

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“…Thus, performance assessment ratings are supposedly much more extensive than pure credit risk ratings in terms of the information that they provide. Sinha (2002) states that many MFI operations are a "black box" and that this creates questions about their performance. As a result, the need for performance assessments is urgent.…”

Section: Theoretical Background Hypotheses and Research Designmentioning

confidence: 99%

Do Microfinance Rating Assessments Make Sense? An Analysis of the Drivers of the MFI Ratings

Mersland

Beisland

2011

SSRN Journal

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Rating assessments of microfinance institutions are claimed to measure a combination of creditworthiness, trustworthiness and excellence in microfinance. Using a global dataset covering reports from 324 microfinance institutions, this study suggests that these ratings are mainly driven by size, profitability, and risk. The ratings do not seem to capture the double bottom-line objective of microfinance institutions, as our analyses are unable to prove any statistical relationship between microfinance ratings and the social objectives of these institutions. Moreover, the association between operational efficiency and microfinance ratings appears weak. Although there are some minor differences between the rating agencies, the overall results suggest that microfinance ratings convey information very similar to that communicated by traditional credit ratings. CEB AbstractRating assessments of microfinance institutions are claimed to measure a combination of creditworthiness, trustworthiness and excellence in microfinance. Using a global dataset covering reports from 324 microfinance institutions, this study suggests that these ratings are mainly driven by size, profitability, and risk. The ratings do not seem to capture the double bottom-line objective of microfinance institutions, as our analyses are unable to prove any statistical relationship between microfinance ratings and the social objectives of these institutions. Moreover, the association between operational efficiency and microfinance ratings appears weak. Although there are some minor differences between the rating agencies, the overall results suggest that microfinance ratings convey information very similar to that communicated by traditional credit ratings. * Corresponding author -roy.mersland@uia.no 2 Do microfinance rating assessments make sense? -An analysis of the drivers of the MFI ratings AbstractRating assessments of microfinance institutions are claimed to measure a combination of creditworthiness, trustworthiness and excellence in microfinance. Using a global dataset covering reports from 324 microfinance institutions, this study suggests that these ratings are mainly driven by size, profitability, and risk. The ratings do not seem to capture the double bottom-line objective of microfinance institutions, as our analyses are unable to prove any statistical relationship between microfinance ratings and the social objectives of these institutions. Moreover, the association between operational efficiency and microfinance ratings appears weak. Although there are some minor differences between the rating agencies, the overall results suggest that microfinance ratings convey information very similar to that communicated by traditional credit ratings.

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“…At present, since most microfinance institutions have black-box problems in their operations, it is urgent to introduce microfinance ratings to clarify the operating conditions of the institutions [11] . The most powerful capability of microfinance lies in the perfect combination of social objectives and financial objectives to achieve two-dimensional performances.…”

Section: Research On the Construction Of The Performance Evaluation S...mentioning

confidence: 99%

A Study on the Performance Evaluation System of Microfinance Companies Under Dual Objectives

Guo

2022

ssr

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Microfinance companies are the result of China’s rural financial reform. Since their creation, they have been undertaking the responsibility of effectively allocating financial resources and guiding the flow of funds to rural areas and underdeveloped areas through the introduction of private capital. The emergence of microfinance companies has intensified the competition in rural financial market and built a new pattern of rural financial service systems. As a result driven by multiple objectives, these microfinance companies must face the issue of how to integrate microfinance services for the “three rurals” (rural economy, rural community, and rural residents) as well as small, medium, and micro enterprises with their own finances in a sustainable and effective manner. On the basis of dual objectives and with full consideration of the characteristics of China’s microfinance companies, this study has constructed a performance evaluation system exclusively for commercial microfinance companies in China by drawing on the performance evaluation system of foreign micro-credit institutions through analytic hierarchy process and Delphi method.

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The performance of rated microfinance institutions in South Asia

Cited by 5 publications

References 0 publications

An Analysis of the Drivers of Microfinance Rating Assessments

An Analysis of the Drivers of Microfinance Rating Assessments

Do Microfinance Rating Assessments Make Sense? An Analysis of the Drivers of the MFI Ratings

A Study on the Performance Evaluation System of Microfinance Companies Under Dual Objectives

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