| Microfinance involves providing credit, thrift, and other financial services and products to the economically underprivileged, to enable them to raise their income levels and living standards. Microfinance institutions (MFIs) act as facilitators towards this end.
In line with its objective to help markets function better, CRISIL pioneered the concept of MFI grading and assessment services in India. A CRISIL MFI Grading is CRISIL's opinion on the sustainability and scalability of the operations of the graded MFI. CRISIL has, so far, assessed over 200 MFIs.
A CRISIL MFI Grading is:
- CRISIL's opinion on the sustainability and scalability of the rated MFI
- A one-time assessment based on the information provided by the MFI
- Assigned on an eight-point scale - mfR1 (highest grading) to mfR8 (lowest)
But the Grading is not:
- A credit rating, and therefore, does not indicate the credit worthiness of the graded MFI
- A proxy for timely payment of interest and principal by, or to, the rated MFI
- A recommendation to purchase, sell, or hold any debt instrument issued by the rated MFI
- Monitored on an ongoing basis
- For use by the rated MFI to mobilise deposits/savings/thrift/insurance funds/other funds (including equity) from its members/clients or the general public
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