The Bangko Sentral ng Pilipinas (BSP) has approved the rules and regulations for the recognition and de-recognition of Microfinance Institution Rating Agencies (MIRAs), particularly for those that provide ratings for banks with micro-finance operations.

This measure aims to create the enabling environment for the appropriate use of objective, credible and competent third-party ratings of micro-finance institutions.
 
These MIRAs provide an intuitional rating rather than just a rating related to a safely grade of a specific instrument or a rating on an institution’s ability to service an existing or proposed debt.

Instead, this institutional assessment looks holistically at the governance, human resource, as well as the strategic, management and financial performance of the micro-finance institution.

“As there is an increased commercialization and growth of the micro-finance industry, the demand for such ratings is increasing,” the BSP said.

Ratings are seen as an effective tool to raise the quality and efficiency in the industry as well as provide confidence for social and commercial investors.

For banks with microfinance operations, ratings may provide valuable assessment that can materially improve access to financing and capital by qualified banks and generate a useful benchmark vis-á -vis other microfinance institutions both locally and internationally.