Microfinance Consensus Guidelines: Definitions of Selected Financial Terms, Ratios, and Adjustments for Microfinance

September, 2003     CGAP

This Consensus Guideline puts forward standard definitions for selected financial terms, commonly used and subject to confusion, and suggests a standard method of calculating certain financial ratios. The definitions established in this document will make comparisons between MFIs more meaningful and promote more transparency in MFI reporting. Transparency is increasingly important as mature MFIs look to commercial funding sources and investors to support their growth.The consensus on these terms is the result of a project intitated by Damian von Stauffenberg of MicroRate with Alternative Credit Techniques, CGAP, IDB, M-Cril, MicroBanking Bulletin, PlaNet Finance, the SEEP Network and SEEP Financial Services Working Group, and USAID.