Ratings and Institutional Assessments

Ratings and institutional assessments aim to provide objective analysis of a financial institution and to benchmark that institution on a scale that allows it to be compared with other institutions. In terms of financial inclusion, several types of ratings are used, including the Microfinance Institutional Rating, social ratings, and credit ratings. The Microfinance Institutional Rating, a standardized term agreed on by four specialized microfinance rating agencies, is the most common of these, providing an opinion on the long-term viability and creditworthiness of a financial institution.

Ratings and institutional assessments provide objective information on a financial institution, which help potential investors to conduct due diligence. They also increase transparency within the sector, improve institutional performance, and attract investors. The opinion expressed in ratings usually blends both quantitative and qualitative information to provide a clear and deep understanding of the particular institution.

A rickshaw driver transports passengers. Photo by Mohammad Sazzad Hossain, 2009 CGAP Photo Contest