IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-540-76641-4_3.html
   My bibliography  Save this book chapter

Market Transparency: The Role of Specialised MFI Rating Agencies

In: New Partnerships for Innovation in Microfinance

Author

Listed:
  • Sanjay Sinha

    (Micro-Credit Ratings International Limited)

Abstract

Two recent studies, one by CGAP in 2003 and the other, in 2004 by Patrick Goodman (sponsored by ADA) show the substantial volume of international investment funds available for microfinance. The latter study indicates that there are now over 40 investment funds supporting microfinance institutions (MFIs) and that some 75% of the funds available are allocated to debt financing with virtually all the rest being allocated to equity financing. However, as the CGAP study indicates, overall foreign investment is only a small proportion of the global total of microfinance lending – $1 billion out of an estimated global total of $15 billion in microfinance loans at end-June 2003. This substantial amount of microfinance lending has taken place because of a significant shift in the financing of microfinance portfolios from being almost exclusively donor-funded to significantly investor-financed. Finance is now being sourced from domestic sources (apex-level NGOs, development banks and even from commercial banks) as well as from the international investment funds referred to above. Prominent amongst the institutions lending to MFIs in Asia are the Palli Karma Sahayak Foundation (PKSF) of Bangladesh, Permodalan Nasional Madani (PNM) in Indonesia, People’s Credit and Finance Corporation (PCFC) in the Philippines and the Small Industries Development Bank of India (SIDBI). The encouraging experience of these institutions in revolving wholesale funds for microfinance has accelerated interest in microfinance investment. As a result, more domestic apex institutions (as wholesale lenders) as well as domestic commercial banks, such as ICICI Bank in India and Bank Mandiri in Indonesia, have become active in this field. In addition, international funds have also shown increasing interest in investing in microfinance.

Suggested Citation

  • Sanjay Sinha, 2009. "Market Transparency: The Role of Specialised MFI Rating Agencies," Springer Books, in: J. D. Pischke & Ingrid Matthäus-Maier (ed.), New Partnerships for Innovation in Microfinance, pages 46-65, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-76641-4_3
    DOI: 10.1007/978-3-540-76641-4_3
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-540-76641-4_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.