Social Rating

Social rating grade scale

Sample social rating report

MicroRate’s social ratings measure the social performance of microfinance institutions (MFIs). Investors are increasingly becoming interested in the double-bottom line of their investments, desiring both financial and social returns. A social rating not only provides an independent analysis of an MFI’s social performance but goes deeper to evaluate an MFI’s social results and social commitment within its context.

In order to accurately capture this information, MicroRate starts with a pre-visit desk analysis of data and information collected from the client. This is followed by a thorough on-site evaluation of the institution by two analysts. The analytical team interviews all levels of management and personnel and visits several of the MFI’s branches. While on-site, the analyst team collects any additional information needed and reviews client files and reports from the MFI’s information system. The on-site evaluation is followed by an analysis of all the data collected which is then consolidated into a final report. Prior to publication, the MFI is provided with a draft version of the report to review in order to ensure that there are no factual errors or misinterpretations. While the review of the draft does not influence MicroRate’s overall opinion, it provides the MFI with the opportunity to verify the data collected.

The final rating grade is a result of careful analysis and discussion by MicroRate’s International Rating Committee. The International Rating Committee is composed of senior management and seasoned analysts from MicroRate’s different field offices to ensure consistent, robust analysis. MicroRate does not apply a rigid rating formula, but considers the impact of each area in determining the final grade. The rating grade provides an opinion on the MFI’s level of social performance and remains valid for up to one year after the rating committee.

Benefits of the Social Rating

MicroRate’s experience and knowledge of industry best practices enable MFIs to use our social rating reports to benchmark themselves against other organizations and to showcase their social performance to current or potential investors. MicroRate’ social ratings allow MFIs to:

  • Demonstrate their social performance capabilities to funders
  • Increase awareness of opportunities to improve social performance
  • Compare social performance with other MFIs through benchmarking
  • Professionalize and improve the MFI’s image

Rating Process

MicroRate’s social rating includes a pre-visit desk analysis, on-site evaluation, and final report. The entire process from the pre-visit desk analysis to final report delivery is about 6-8 weeks.

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Technical Guide: Performance and Social Indicators for Microfinance Institutions
Washington D.C., May 16th 2014. - MicroRate published the Technical Guide: Performance and Social Indicators for Microfinance Institutions. This document gives the interpretation and calculation of the industry’s 18 most commonly used performance indicators.Four new indicators focus on social performance. … Continue reading