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Morgan Stanley's Approach to Assessing Credit Risks in the Microfinance Industry


  • Miguel Arvelo
  • Ju-Lie Bell
  • Christian Novak
  • Juliette Rose
  • Shally Venugopal


Growing investor interest in microfinance combined with strong demand from microfinance institutions (MFIs) for capital have caused the financial industry and rating agencies to seek more reliable and precise methods for assessing the risks of MFIs. Drawing on the work of various industry leaders as well as its own experience, Morgan Stanley's Microfinance Institutions Group has created a comprehensive internal credit analysis and rating methodology-one that, by producing global (foreign and local currency) scale ratings, enables its analysts to assess and compare risks both within the growing microfinance sector and relative to other sectors. Copyright (c) 2008 Morgan Stanley.

Suggested Citation

  • Miguel Arvelo & Ju-Lie Bell & Christian Novak & Juliette Rose & Shally Venugopal, 2008. "Morgan Stanley's Approach to Assessing Credit Risks in the Microfinance Industry," Journal of Applied Corporate Finance, Morgan Stanley, vol. 20(1), pages 124-134.
  • Handle: RePEc:bla:jacrfn:v:20:y:2008:i:1:p:124-134

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    References listed on IDEAS

    1. Barberis, Nicholas & Thaler, Richard, 2003. "A survey of behavioral finance," Handbook of the Economics of Finance,in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 18, pages 1053-1128 Elsevier.
    2. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2001. "Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance," NBER Working Papers 8655, National Bureau of Economic Research, Inc.
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