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      New tier definitions for microfinance institutions will help investors

      New tier definitions for microfinance institutions will help investors

      The microfinance industry is in need of an objective set of criteria that acts as a proxy for the maturity of microfinance institutions. Microrate has come up with a set of definitions that will help promote clarity and transparency in the industry.

      Historically, the microfinance industry referenced a system of three or four “tiers" to differentiate between MFI types. However, the definitions were often vague or based on a single indicator such as size.

      With the help of the e-MFP Action Group of Investors in Tier 2/3 MFIs, Microrate has just published a new set of criteria that will help bring consistency and transparency to the industry.