Global microscope on the microfinance business environment 2012

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borrowers (that is, defaults and arrears)?”
l Scoring: 0=Credit bureaus do not exist; 1=Credit
bureaus are weak and unreliable in most of
these ways; 2=Credit bureaus are weak in some
of these ways; 3=Credit bureaus are weak in one
of these ways; 4=Credit bureaus provide
comprehensive information on the whole range
of transactions and also include positive
information about borrowers (on-time payment
history, etc) and adequate protections for
borrowers and lenders
(10) Policy and practice for fi nancial transactions
through agents (for example, mobile phones,
points-of-service, etc): “Are regulations and
technology in places that allow innovations in
microfi nance, such as mobile-phone transactions
and POS options? Does the policy framework
address risks? Are these agent mechanisms for
fi nancial transactions being implemented and used
in practice?”
l Scoring: 0=The environment is not conducive
and there are no existing agent mechanisms in
the country; 1=The environment is being
improved, and activities are at a pilot stage;
2=The policy environment is conducive, and a
small share of transactions through agents do
occur; 3=The environment is conducive, and a
moderate number of transactions occur through
agents (although not all possible types); 4=The
environment is conducive, and many
transactions occur through many different types
of agent
Adjustment factor: Stability
(11) Political shocks to microfi nance: “Have there
been political tensions or other signifi cant changes
that would affect the operation of or fi nancial
stability of microfi nance/microcredit?”
l Scoring: 2=The country has been free of any
political developments affecting microfi nance
operations; 1=Political events have affected
microfi nance operations in some, but not all,
parts of the country; 0=Political events have
shocked the entire institutional system in the
© The Economist Intelligence Unit Limited 2012
<strong>Global</strong> <strong>microscope</strong> on the microfi nance business environment 2012
country, such that all aspects of the
microfi nance environment are affected.
(12) Political Stability: “How important are the
internal and external threats to the stability of the
serving government or the political system in
general?”
l Scoring: The Economist Intelligence Unit’s
Political stability rating is a category score in its
Risk Briefi ng. It is the average of fi ve individual
scored indicators: Social unrest; Orderly
transfers; Opposition stance; Excessive
executive authority; and International tensions.
0=Extreme instability, while 100=Very stable.
Background variables
The Microscope index includes a number of
background variables, which assess the depth and
penetration of microfi nance services in a given
country. These variables are output, rather than
input variables and are not used in the calculation
of the index.
The following background variables are included
in the index:
l Financial performance: weighted average return
on assets, median return on assets.
l Outreach: portfolio size, average loan balance
as a percentage of GNI per head, growth in
number of borrowers, growth of gross loan
portfolio.
l Deposits: number of deposit accounts, growth of
deposits; loans/deposits, average deposit
balances as a percentage of GNI per head.
l Effi ciency: borrowers per staff member; cost per
loan; cost per borrower.
l Risk: portfolio at risk greater than or equal to 30
days; add percentage of write-offs.
l Penetration: microfi nance loans/borrowers as a
percentage of population; microfi nance loans/
borrowers as a percentage of the poor.
All data were sourced from MIX market.