The Inter-American Development Bank’s Multilateral Investment Fund (MIF) and Corporación Andina de Fomento (CAF) announced recently that they will support a project to assist MFIs in the Latin America/Caribbean region obtain credit risk ratings and performance assessments. Such reports will increase the level of transparency and understanding between donors, practitioners, and borrowers. A study done by MIF concluded that microfinance institutions that underwent ratings and scrutiny saw greater amounts of funding made available to them by donors.
This new project will target MFIs with loan portfolios ranging from $1m-$15m USD and the cost of assessment will be in part borne upon the MIF and CAF. Hopefully it will also serve to encourage regional MFIs to share their experiences and industry best practice.