3rd presentation mfr

Financial transparency
as a tool for
Increasing investments
November 15, 2019
Dushanbe, Tajikistan
By Farida Abdulhafizova

2MFR all rights reserved 2019
is the only rating agency specialized in certification and
inclusive finance with a global coverage:
100+ countries served from 8 offices.
MFR Company Profile

MFR Company Profile: SERVICES
FINANCIAL
RATING
External Context
Governance
& Strategy
Financial Profile
Loan
Portfolio
Quality
Systems &
Controls

SOCIAL
RATING
Social
Performance
Management
Systems
Client
Protection &
Social
Responsibility
OutreachQuality of the
services

Appropriate
product
design and
delivery
CLIENT
PROTECTION
PRINCIPLES
Prevention of
over-
indebtedness
Mechanisms
for complaint
resolution
Privacy of
client data
Fair and
respectful
treatment of
clients
Responsible
pricing
Transparency

Diverse variety of services and client typologies
MFR Company Profile
RATING and PRE-RATING SERVICES
CERTIFICATIONS
SERVICES for INVESTORS
SERVICES for REGULATORS
Financial Rating • Social Rating • Credit Rating • Mini-
assessments • Diagnostics
Subscription • Country screening • Deal sourcing• Due diligence•
Investment advisory
Study • Advisory • Deal sourcing• Training • Supervision
Smart Campaign Certification • European Code of Good Conduct
SPI4 Audit • SPI4 Alinus • TrueLift • PPI Certification®

• MFR is accredited by MFX and TCX to
conduct ratings for the purposes of
financial service providers accessing
affordable hedging products to mitigate
foreign exchange risk
• MFX and TCX require an external credit
rating by MFR with a ranking of at least
“Creditworthy” to waive a requirement of
MFX to post collateral for a financial
institution’s access to the hedging
products
• MFR and TCX carry out due diligence of
MFR to maintain accreditation
MFR Company Profile

Experience with assessing financial
institutions offering Islamic banking
products:
Training to the Islamic Development
Bank, including a training in 2017 on
the following topics:
• Financial and operational
performance and risk profile of
financial institutions
• Social performance and client
protection
• Due diligence for investment
decisions
• Certifications
MFR Company Profile

As of December 2018,
2,206+ assignments in 101 countries
662
296
572
176
194
213
93
Product diversification
Financial Rat ings
Social Ratings and assessm ents
Credit Ratings
Certifications
Pre-Rating assessm ents
Other assessm ents and advisory services
Training services
55%
15%
13%
12%
6%
0 % 20% 4 0 % 60 %
Latin Am erica an d
Car ib b e an
Africa an d M EN A
In d u strialized Cou n t ries
Cen tral Asia
Asia
Global out reach
MFR Company Profile
www.mf-rating.com

INTRODUCTIONFINANCIAL TRANSPARENCY
AS A TOOL
TO INCREASE INVESTMENTS

FINANCIAL TRANSPARENCY AS A TOOL TO INCREASE INVESTMENTS
CREDIT = TRUST*
*https://www.etymonline.com/search?q=credit

FINANCIAL
TRANSPARENCY

Financial transparency: WHY?
BOOST YOUR
GROWTH
THROUGH
MONITORING AND
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION

BOOST YOUR
GROWTH
THROUGH
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION
- What is the size of the loan portfolio of the overall financial
sector?
- What share of that portfolio is held by non-banking sector?
- What is the delinquency rate for the financial market and
that for MFIs?
- How is the portfolio distributed among administrative
divisions of the country?
- What share of the market is held by top players?
- What is a typical average loan size? How does performance
of my investee compare to that of the peers or of the
market?

BOOST YOUR
GROWTH
THROUGH
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION
Source: https://www.imf.org/external/pubs/ft/fandd/2013/12/brandao.htm)

FINANCIAL TRANSPARENCY AS A TOOL TO RAISE INVESTMENT SENTIMENT
BOOST YOUR
GROWTH
THROUGH
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION
Source: https://www.imf.org/external/pubs/ft/fandd/2013/12/brandao.htm)

BOOST YOUR
GROWTH
THROUGH
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION
- Non-transparent corporate entities are more prone to
investor sentiment (Firth, M., Wong, K. P., & Wong, S. M. L. (2015).
Corporate transparency and the impact of investor sentiment on
stock prices. Management Science, 61(7), 1630-1647. doi:
10.1287/mnsc.2014.1911)

BOOST YOUR
GROWTH
THROUGH
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION
Higher transparency
allowed customer to
make more informed
decisions that leads
to higher
competition and
lower % rates

BOOST YOUR
GROWTH
THROUGH
BENCHMARKING
IMPROVE
CUSTOMER SERVICE
INCREASE
FUNDING
INCREASE
FINANCIAL
INCLUSION

Financial transparency tools
MIS
ExternalAudit
InternalControl
Performance
Measurement
Benchmarking
Performance
reporting
standards
Rating
Supervision
Consultants
(national/international)
IT service providers
(national/international)
Auditors
CAMEL
PEARLS
Other
assessme
nt
tools
ATLAS
AMFOT?
Union of
Banks?
Informal
exchange
of data?
CGAP,
SEEP
Rating
agencies
(Specializ
ed and
Mainstrea
m)
NBT,
Monitorin
g services
ATLAS
Source: Access for all: building inclusive financial systems / Brigit Helms, 2006

Financial transparency: COSTS

Financial transparency: HOW

COVERAGE
1000 FSPs and 70 countries
https://data.atlasdata.org/vue/data-subscription

• Data can be provided by individual FSPs or by the
professional association.
• Data can be provided anytime during the year and are
uploaded maximum one month after reporting if they are
consistent.
• Data can be reported for a single period (e.g. fiscal year
2019) or for multiple periods (e.g. last 3 fiscal years).
• Data for a given year (e.g. 2019) start to be available during
the same year (e.g. the data as of Mar 2019 reported in May
2019 are uploaded in June 2019)
HOW DOES IT WORK?

Data submission tool

Examples of use
OPTION 1 OPTION 2
Benchmark
for
association
Overview: Global or regional
benchmark
Detailed: any benchmark,
chosen by the association
APR
FSP 1, FSP2, etc Region
FSP 1
% PAR30
GlobalFSP 2 Association RegionFSP 1
% PAR30
IndividualFSP 2 Association Mediu
m size
APR
FSP 1, FSP2, etc Sub-Region

3rd presentation mfr

Recommended

Recommended

More Related Content

Similar to 3rd presentation mfr

Similar to 3rd presentation mfr (20)

More from Nasim Abdullohojaev

More from Nasim Abdullohojaev (14)

Recently uploaded

Recently uploaded (20)

3rd presentation mfr