This microfinance grading report of 'TSPI Development Corporation, Philippines', prepared by CRISIL, assigns it a grade of mfR2, identifying the following:
* Positives:
o Long track record of over two decades in microfinance;
o Superior governance practices;
o Solid financial profile and superior accounting policies;
o Good asset quality;
o Robust systems, processes and controls;
o High capability to scale-up and sustain.
* Negatives: High operating expense ratio, member dropout ratio, working capital requirement, employee turnover.
CRISIL's microfinance grading:
* Is its current opinion on the ability of a microfinance institution (MFI) to conduct its operations in a scalable and sustainable manner;
* Is assigned on an eight point scale, with mfR1 being the highest and mfR8 the lowest;
* Is a measure of the overall performance of an MFI on a broad range of parameters under CRISI's MICROS framework, where MICROS stands for: Management, Institutional arrangement, Capital adequacy and asset quality, Resources and asset-liability management, Operational effectiveness, Scalability and sustainability.
The report also provides a country profile of the Philippines that focuses on microfinance, describing its following:
* Strengths:
o Supportive government initiatives;
o Successful transformation of MFIs into banks.
* Weaknesses:
o Lack of appropriate policy guidelines.