Requirements for MFI Partnership
E&O’s Lending Policy
We lend exclusively to MFIs who:
- offer or are planning to offer housing microfinance products,
- extend their services to the rural and urban poor, inclusive of isolated or hard to reach areas,
- allocate a predetermined percentage of their budget to providing social programs such as financial literacy,
- are willing to explore new technologies to lower operational costs and interest rates,
- do not charge exorbitant interest rates,
- do not discriminate based on race, gender, or religion,
- extend their services to marginalized women,
- meet the needs of the communities they serve with a healthy mix of village, solidarity and individual loans and other products.
E&O’s Lending Criteria:
We will evaluate applications based on:
- portfolio quality, health and performance,
- strategic direction and senior management,
- social mission and client demographics,
- economic, political stability and legal framework of countries of operation.
High Level Requirements
MFI must:
- serve at least 5,000 borrowers, or have a minimum US$1,000,000 gross loan portfolio,
- maintain portfolio-at-risk (i.e., outstanding balance of all loans with payments in arrears beyond 30 days) below 10%,
- be operationally self-sufficient, or demonstrate a clear plan to achieve operational self-sufficiency.
Other Due Diligence Requirements:
- Year-end data for the previous three years and monthly data for the most recent month and prior eleven months,
- Number of Borrowers, Loans and Savers,
- Percent of Borrowers that are women, live in rural areas, and deeply impoverished (living on $2 per day or less or below the national poverty line),
- Number of loans and Value of Gross Portfolio and Portfolio at Risk for standard loans, restructured loans and refinanced loans,
- Number and amount of Loans Written-off,
- Independent audit reports covering at least the two most recent years,
- Schedule of Long Term liabilities including lender name, type of currency, cost of funds, term and payment schedule,
- A credit rating or other similar external evaluation/recommendation,
- A financial and operational profile at the MIX Market, the microfinance industry’s clearinghouse for standardized information about the financial strength and performance of MFIs,
- Three-year financial projections and accompanying business plan,
- Portfolio policies and reports,
- Board structure and composition.
