What is a rating? What purpose does a rating serve?
How do I read a GIRAFE rating ?
What does GIRAFE stand for ?
What type of information is the GIRAFE rating based on ?
How does Planet Rating help MFIs in their search for funds ?
Why develop a rating instrument specifically for microfinance ?
Why develop a NEW microfinance rating instrument ?
What is a rating? What purpose does a rating serve?
The term "rating" designates a grade given to an institution. It synthesizes the evaluation and provides a means of comparison with other institutions. The GIRAFE rating methodology has been designed to measure the financial, organizational and operational sustainability of MFIs. In order to attract new financing sources to the MF sector, one of our objectives, Planet Rating posts rating and evaluation reports on this website and disseminates reports to donors and investors.
How do I read a GIRAFE rating ?
The six evaluation areas of GIRAFE receive an area rating from “a” (best) to “e” (worst). The global rating is on an scale from A+ to E, and is accompanied by a trend rating of either positive, negative, or stable. For more information please refer to our Presentation document.
What does GIRAFE stand for ?
The acronym GIRAFE represents each of the six evaluation areas covered by the comprehensive evaluation methodology: Governance and Decision Making; Information Management and Systems; Risks Management; Activities: Products and Services; Financing and Liquidity and Efficiency and Profitability.
What type of information is the GIRAFE rating based on ?
The GIRAFE rating methodology is based on the collection and analysis of qualitative and quantitative data for both financial and non-financial information. The areas G, I and R are assessed primarily through a qualitative review of procedures, formal and informal operations, governance, training, information and management systems and MFI risk assessment. We focus our quantitative analysis on the A, F and E areas (e.g., loan portfolio, profitability, self-sufficiency and efficiency).
How does Planet Rating help MFIs in their search for funds ?
As a rating instrument, GIRAFE is intended to facilitate the flow of funds to the microfinance sector. While MFIs are seeking funds from commercial lenders and other sources, these funders do not have at their disposal tools adapted to evaluate MFI viability.
Why develop a rating instrument specifically for microfinance ?
Why not use conventional rating methodologies? Microfinance programs have diverse structures, products and credit methodologies. To comprehensively asses MFI performance, one must understand the particularities of the sector as well as distinctive regional characteristics, and use a methodology evaluating not only financial performance but also organizational strenghts.
Why develop a NEW microfinance rating instrument ?
The early MFI evaluation methods focused mainly on internal control and were not designed for public distribution. Other methodologies have a very regional focus or do not have "official" ratings. The advantage of the GIRAFE instrument is that it can be applied to all MFIs using both qualitative and quantitative standards. These standards are recognized by international microfinance experts, including CGAP (the Consultative Group to Assist the Poorest).