Quality Label for Microfinance Investment Funds

The key points considerations when awarding a quality label to a microfinance investment fund
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This presentation discusses the various points that need to be considered when awarding the quality label for microfinance investment funds. It lists the following guiding points for issuing the quality label:

  • The Fund should comply with certain minimum rules of transparency and prudence;
  • The label should eliminate flagrant abuses and concentrate on providing quantitative information.

The presentation also lists minimum conditions of transparency and good governance that the Fund should meet, in order to qualify for the quality label. These include:

  • Publishing:
    • Relevant details of the investment;
    • Its main investment policies;
    • Information about its management structure and details of the governing bodies and members.
  • Having at least 75% of its microfinance portfolio in rated MFIs;
  • Disclosing fees in a way that allows investors to understand the running costs.

The presentation concludes by providing the following information about administering the label:

  • A specially created agency that awards social impact ratings would be the ideal body to administer the label;
  • The label should have a lean structure that relies largely on outside sources to generate the information it needs;
  • It should be awarded for a limited time period.