Promoting Inclusive Markets and Financial Systems
Microfinance Reporting Standards Committee Concept Note
by Financial Services Working Group in 2009
With the publication of Measuring Performance of Microfinance Institutions: A framework for reporting, analysis and monitoring by SEEP in 2005, the microfinance industry issued its first update to microfinance reporting standards in ten years. In defining these new reporting standards, the authors consulted experts from among investors, donors, rating agencies, MFIs and networks to ensure that the latest standards met the needs and reflected the current state of microfinance service delivery.
Based on discussion with these actors and given the rapid pace of change in the sector, the authors suggested in the preface to the new reporting standards that a microfinance standards committee would be created to monitor industry developments and ensure that reporting standards keep pace with industry developments. Representatives from various stakeholder groups met in October 2004 on funding from the initial standards development project and validated the committee concept. Without subsequent funding, the committee never finalized statutes and operating procedures or took up function.
The pace of change in the microfinance industry calls for reporting standards that ensure industry developments are quickly translated into comparable information allowing analysts to study industry trends and comfort investors. As more institutions become regulated service providers, reporting standards must reflect information on capital adequacy norms and other disclosures relevant to deposit taking institutions. New operational models, such as the bank agent model made popular in India and/or new service delivery channels such as mobile phones, ATMS and other points of service, require application of existing standards to new situations or potentially the development of new standards. A permanent Microfinance Reporting Standards Initiative and a committee will bring continuity and consistency to reporting in a rapidly evolving sector.