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Archive for mission drift

Fitch – Risks in Microfinance ; the New Rating Criteria

Click the following link to download the Report:-  fitch-microfinance-12-jun1   

 Fitch says in a published today that the fast growing microfinance industry, which provides financial services to low-income populations in emerging markets, could be exposed to greater risks. Separately, the agency has published its rating criteria that formalise the agency’s existing approach to microfinance institutions (MFIs).

Fitch notes that high growth and transformation within the microfinance sector puts pressure on internal control systems, and places new demands on the quality of management and corporate governance. Increased access to commercial funding brings new demands in risk management, disclosure, and moves MFIs away from their traditional base of public or donor funding. Transformation to for-profit and regulated structures heightens the risk of “mission drift”, leading the MFI away from its traditional social mission.