Rural banks and microfinance rating agencies share the benefits and experiences of ratings

April 9, 2010 By Leave a Comment
RBAP-MABS, with the support of USAID/Philippines and the Rural Bankers Research and Development Foundation Inc. (RBRDFI), held a workshop entitled “Benefits and Experiences of Rural and Microfinance-Oriented Banks on Ratings” on April 8 at the Pan Pacific Hotel in Manila. Twenty-four bankers from 16 rural banks participated in the workshop held in collaboration with MICRA Philippines, MicroFinanza Rating, and Planet Rating.
The workshop started off with presentations from the three microfinance institution rating agencies (MIRAs), which provided the participants with a complete picture of MIRAs operating in the Philippines. This was followed by a discussion by the Bangko Sentral ng Pilipinas (BSP) on Circular No. 685: Rules and Regulations for the Recognition of Microfinance Institution Rating Agencies issued on April 7. MABS participating banks – First Macro Bank, GM Bank, and Green Bank – ended the morning session by sharing their experiences on actual rating and assessment.
The afternoon session was filled with hands-on exercises on how ratings are conducted. Each agency presented an actual case study on one component used in their evaluation. The participants played the role of raters and conducted their own assessment based on the given case studies and criteria. For each of the three case studies, the assigned rating agencies presented the actual rating that was given and explained how this was determined. Interestingly, the participants turned out to be relatively stricter than the rating agencies in evaluating microfinance institutions. Thus, through an open forum, the bankers and the representatives of rating agencies thoroughly discussed how ratings are given based on specific bank conditions, trends, and other socio-economic factors.

RBAP-MABS, with the support of USAID/Philippines and the Rural Bankers Research and Development Foundation Inc. (RBRDFI), held a workshop entitled “Benefits and Experiences of Rural and Microfinance-Oriented Banks on Ratings” on April 8 at the Pan Pacific Hotel in Manila. Twenty-four bankers from 16 rural banks participated in the workshop held in collaboration with MICRA Philippines, MicroFinanza Rating, and Planet Rating.

The workshop started off with presentations from the three microfinance institution rating agencies (MIRAs), which provided the participants with a complete picture of MIRAs operating in the Philippines. This was followed by a discussion by the Bangko Sentral ng Pilipinas (BSP) on Circular No. 685: Rules and Regulations for the Recognition of Microfinance Institution Rating Agencies issued on April 7. MABS participating banks – First Macro Bank, GM Bank, and Green Bank – ended the morning session by sharing their experiences on actual rating and assessment.

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Filed Under: MABS Highlights Tagged With: , , , , , , , , ,

BSP Sets Rules for the Recognition of Microfinance Institution Rating Agencies

March 31, 2010 By Leave a Comment
The Monetary Board has approved the rules and regulations for the recognition and de-recognition of Microfinance Institution Rating Agencies (MIRAs), particularly for those that provide ratings for banks with microfinance operations.  This measure aims to create the enabling environment for the appropriate use of objective, credible and competent third-party ratings of microfinance institutions.  These MIRAs provide an institutional rating rather than just a rating related to a safety grade of a specific instrument or a rating on an institution’s ability to service an existing or proposed debt.  Instead, this institutional assessment looks holistically at the governance, human resources as well as the strategic, management and financial performance of the microfinance institution.
As there is an increased commercialization and growth of the microfinance industry, the demand for such ratings is increasing. Ratings are seen as an effective tool to raise the quality and efficiency of microfinance institutions, increase the transparency in the industry as well as provide confidence for social and commercial investors.  For banks with microfinance operations, ratings may provide valuable assessments that can materially improve access to financing and capital by qualified banks and generate a useful benchmark vis-à-vis other microfinance institutions both locally and internationally.

The Monetary Board has approved the rules and regulations for the recognition and de-recognition of Microfinance Institution Rating Agencies (MIRAs), particularly for those that provide ratings for banks with microfinance operations.  This measure aims to create the enabling environment for the appropriate use of objective, credible and competent third-party ratings of microfinance institutions.  These MIRAs provide an institutional rating rather than just a rating related to a safety grade of a specific instrument or a rating on an institution’s ability to service an existing or proposed debt.  Instead, this institutional assessment looks holistically at the governance, human resources as well as the strategic, management and financial performance of the microfinance institution.

As there is an increased commercialization and growth of the microfinance industry, the demand for such ratings is increasing. Ratings are seen as an effective tool to raise the quality and efficiency of microfinance institutions, increase the transparency in the industry as well as provide confidence for social and commercial investors.  For banks with microfinance operations, ratings may provide valuable assessments that can materially improve access to financing and capital by qualified banks and generate a useful benchmark vis-à-vis other microfinance institutions both locally and internationally.

Read the rest of the article on the BSP website.

See BSP Circular 685: “Rules and Regulations for the Recognition and De-recognition of Microfinance Institution Rating Agencies”

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MIX launches its new MIX Market this June

June 8, 2009 By Leave a Comment

Dear Microfinance Colleague,

Over the last year, MIX has been working on redeveloping MIX Market, focusing on improving your user experience and increasing platform stability and flexibility. We are pleased to announce that we are on schedule to launch the new MIX Market in mid-June 2009! [Read more...]

Filed Under: MABS Reports Tagged With: ,