Using the Same Tape Measure: MicroRate To Launch Tool for Rating Microfinance Funds
Thursday, May 25, 2006
by Bill Baue
The rating tool, a project supported by Gray Ghost Microfinance Fund, Omidyar Network, and Gates Foundation, is yet another step toward establishing microfinance as a distinct asset class.
Microfinance, which provides tiny loans to help people bootstrap out of poverty by running small (often one-person) businesses, took another step toward becoming a distinct asset class with the advent of a mechanism for objectively rating microfinance funds. MicroRate, an independent company that already rates microfinance institutions (MFIs), has been working to develop a microfinance fund-rating tool for several years. At a May 1 Silicon Valley Microfinance Network (SVMN) talk, Bob Patillo of the Gray Ghost Microfinance Fund (a $75 million microfinance “fund of funds”) announced a project to support the MicroRate rating tool that is also backed by the Omidyar Network and the Gates Foundation.
“This rating tool is critically important in advancing microfinance as a distinct asset class because it is the first attempt to stop comparing apples to oranges, which is what investors have been forced to do when shopping for microfinance investment products,” said David Satterthwaite, CEO of Prisma MicroFinance
and a moving force behind “This rating tool is critically important in advancing microfinance as a distinct asset class because it is the first attempt to stop comparing apples to oranges, which is what investors have been forced to do when shopping for microfinance investment products,” said David Satterthwaite, CEO of Prisma MicroFinanceMicroCapital, a website that provides “honest, no-frills” information on microfinance.
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