Morgan Stanley's Approach to Assessing Credit Risks in the Microfinance Industry |
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| Authors: | Miguel Arvelo Ju‐Lie Bell Christian Novak Juliette Rose Shally Venugopal |
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| Affiliation: | 1. Responsible for the Microfinance Group's coverage of Latin America. His earlier experience with Morgan Stanley includes Latin America credit coverage across multiple sectors and Internal Audit with a focus on Tax and Treasury.;2. This article has been prepared for information purposes only and does not constitute individually tailored advice on how to assess the credit risks of a Microfinance institution and should not be relied on as such. Readers should seek independent advice prior to making any investment decision based on this article or for any necessary explanation of its contents. Morgan Stanley does not provide any representation or warranty, express or implied, as to the article and specifically disclaims fitness for a particular purpose. Morgan Stanley has no obligation to up‐date you when the information contained in this article becomes out of date.;3. Responsible for the Microfinance Group's coverage of Latin America, Europe, and Asia. Her prior experience includes power and utilities investment banking, private equity, and distressed debt analytics.;4. Runs the debt products team of Morgan Stanley's Microfinance Institution Group. He has prior experience in credit risk management and structured financing/capital markets covering Latin America, and has also served as a member of the Advisory Board of FIS Empresa Social, one of the leading microfinance institutions in Argentina.;5. Responsible for the Microfinance Group's coverage of South/Central Asia, Europe, and Africa. Her previous experience includes working across a wide range of asset classes in Morgan Stanley's Private Wealth Management Division.;6. Responsible for the Microfinance Group's coverage of South/Central Asia and Africa. Her prior experience with Morgan Stanley includes debt structuring and financial advisory services for Morgan Stanley's public sector infrastructure clients. |
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| Abstract: | Growing investor interest in microfinance combined with strong demand from microfinance institutions (MFIs) for capital have caused the financial industry and rating agencies to seek more reliable and precise methods for assessing the risks of MFIs. Drawing on the work of various industry leaders as well as its own experience, Morgan Stanley's Microfinance Institutions Group has created a comprehensive internal credit analysis and rating methodology—one that, by producing global (foreign and local currency) scale ratings, enables its analysts to assess and compare risks both within the growing microfinance sector and relative to other sectors. |
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