Microfinance Institutional Rating (MIR)

A rating comparability table is useful to investors and FSPs seeking to compare themselves to other FSPs in local or other markets. The Rating Grade Comparability Table for specialized microfinance ratings agencies segments rating grades into four categories, excellent, good, fair, and weak. Each of the rating categories is segmented based on a continuum of performance and risk and encompasses from two to four rating grades per rater. The table is based on the specialized microfinance ratings agencies’ respective methodologies as of September 2012. The complete report and details on the methodology used to develop the rating comparability table can be found here.

Category Classification Definition M-Cril MFR Microrate
1 Excellent Excellent performance
Low or well-managed short-medium term risk
α+
α
AAA
AA
A
α+
α
2 Good Good performance
Modest or well-managed short-medium term risk
α-
β+
BBB
BB
α-
β+
3 Fair Fair performance
Moderate to medium-high risk
β
β-
B
CCC
β
β-
4 Weak Weak or poor performance
High to very-high risk
γ+
γ
CC
C
D
γ+
γ

Social Rating

Each specialized microfinance rating agencies uses different social rating scales. As a general guideline, the rating grades can be divided into four levels of performance 1) “excellent”, 2) “very good or good”, 3) “adequate, medium, or fair”, and 4) and ”weak” to negative, which may include doing harm to clients. The table below provides a general comparison of the different rating grades in order to facilitate a common understanding for those who use ratings as part of their assessment.

Category Classification Definition M-Cril MFR Microrate
1 Excellent Excellent social performance and responsible finance practices
High likelihood to achieve social mission
α+
α
AA+
AA
AA-
A+
A
A-
★★★★★
★★★★☆
★★★★
2 Good Good social performance and responsible finance practices
Likely to achieve social mission
α-
β+
BB+
BB
BB-
★★★☆
★★★
3 Fair Fair social performance and responsible practice
Partial alignment to social mission
β
β-
B+
B
B-
★★☆
★★
4 Weak Weak social performance and responsible practices
Risk of mission drift
γ+
γ
C+
C
C-
D+
D
D-
★☆