IFMR Trust - Announcements - MoU with CRISIL

MoU with CRISIL

Credit Rating Information Services of India Ltd (CRISIL), ICICI Foundation for Inclusive Growth (ICICI Foundation) and IFMR Trust have signed an MoU (Memorandum of Understanding) to promote projects aimed at development of asset classes that will impact low-income households.

Under the agreement signed in Mumbai on July 17, 2008, CRISIL will develop products for rating microfinance institutions, urban local bodies, and vocational training institutes, enabling better analysis and a deeper understanding of these entities. CRISIL will also publish and disseminate rating criteria for such entities.

IFMR Trust will facilitate the process by providing access to enterprises working in these areas. ICICI Foundation will ensure wide dissemination of products developed under the MoU.

The rating products are aimed at developing viable commercial enterprises that impact low-income households by providing a variety of relevant goods and services (vocational training, microfinance, drinking water) to low-income households.

Commercial projects in the areas of rural development and poverty alleviation typically suffer lack of adequate structuring and inadequate risk mitigation; sponsors often fail to appreciate the risks inherent in these projects. As a result, such projects do not find funding at reasonable cost, thereby impairing their chances of commercial success.

CRISIL, with its rich experience in developing rating criteria for financial products, projects, and services, is ideally placed to design and develop criteria and rating standards for such institutions and enterprises.

Present at the occasion of the MoU signing, CRISIL Managing Director and Chief Executive Officer Roopa Kudva said: "We are delighted to partner ICICI Foundation and IFMR Trust. Our rating products will enable microfinance institutions and urban local bodies to access funding from mainstream investors and lenders; vocational training institutes can use these ratings to build credibility and improve placements for their students."

Dr Nachiket Mor, President, ICICI Foundation for Inclusive Growth, said: "ICICI Foundation is very pleased to facilitate the partnership between CRISIL and IFMR Trust. It is our belief that this partnership will make it possible for both these entities to develop new models that will significantly expand the set of market-based opportunities available to low-income households."

Bindu Ananth, President, IFMR Trust, who was also present, said: "This collaboration will tremendously accelerate financial market access for a variety of emergent asset classes including microfinance, SME/ rural supply chain finance and municipal finance."

IFMR Trust will work with CRISIL to develop market standards for these asset classes, and partner with ICICI Foundation to disseminate and train a broad set of market participants, she added.

"This partnership represents an important step forward for IFMR Trust in its mission of ensuring that every individual and every enterprise has complete access to financial services," Bindu Ananth said. "It is our privilege to be associated with CRISIL and ICICI Foundation, both thought leaders in their fields."

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MoU with CRISIL