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Agyemang Emmanuel & Baah-Peprah Prince

Agyemang Emmanuel &  Baah-Peprah Prince
MSc. Business Administration
Handelshøyskolen ved UiA
06. juni 2017

Dataset on the Microfinance Industry

Rating assessments of microfinance institutions are claimed to measure a combination of creditworthiness, trustworthiness and excellence in microfinance. “Beisland and Mersland”.

In our opinion, it is crucial that rating agencies progress in the development of social ratings, as a complement of financial ratings. In a whole, they both streamline the activities of microfinance institutions towards their mission of reducing poverty and hence mars mission drift.

The project we took part is a Dataset on the Microfinance Industry with Dr. Celeste De la Huerta and Professor Roy Mersland. Our work consisted on collecting rating reports from Microfinance Institutions around the World. In the Microfinance Industry, ratings have been elaborated by specialized rating agencies that were created to bridge a gap in the market left by traditional credit rating agencies. The dataset includes rating reports from Microfinanza Rating, MicroRate, Planet Rating, M-Cril and Crisil. The methodologies used by these rating agencies have been tested and refined in the past 15 years as the Microfinance Industry has matured.There are two types of ratings: Microfinance Institutional Ratings and Social Ratings.

The Dataset includes variables from both Institutional Ratings and Social Ratings. So, our job was to search for both types of reports for a specific MFI. Microfinance Institutional Ratings provide information on governance, credit operations, operational risk and long term perspective. Social Ratings assess the MFIs ability to translate its social mission into practice. Social ratings include information such as client protection principles, social responsibility to staff, proportion of clientele that are women, living in rural areas or poor, among other indicators. Once the reports have been identified, information is inputted in an Excel file. The variables have been selected based on a combination of theoretical interest and availability. The result is a dataset that covers every aspect of a microfinance institution and will allow comprehensive research on trade-offs, mission drift, governance, etc. in the microfinance industry.

We were given a list of MFIs and we followed a strategy where we first searched for the MFI in the website of MixMarket, an online platform that gathers institutional data from financial service provides and supporting organizations. Additional reports were directly retrieved from the MFIs website. Our last search was done in Google. We also tried to contact the MFIs directly.

In our opinion, it is crucial that rating agencies progress in the development of social ratings, as a complement of financial ratings. In a whole, they both streamline the activities of microfinance institutions towards their mission of reducing poverty and hence mars mission drift.