Microfinance Transparency Glossary
- Active Product
- Microloan product with more than 50 borrowers
- Active clients with loans
- Approximate number of individuals who currently have an outstanding microloan balance
- Approximate % Female Clients
- Estimated percentage of the borrowers who are female
- Approximate % Urban Clients
- Estimated percentage of the borrowers who live in urban areas
- Bank
- A licensed financial intermediary regulated by a state banking supervisory agency
- Compulsory Deposit
- A requirement for borrowers to set aside funds as a condition on receiving the loan
- Credit Union / Cooperative
- A nonprofit, member-based financial intermediary, not regulated by a state banking supervisory agency
- Decl Bal
- Declining Balance - interest calculation based on the outstanding loan balance , i.e the money that remains with the borrower as the loan is repaid
- Disbursement Date
- The date that the borrower was given the money
- Distribution at Disbursement (Est.)
- An estimated percentage of loans that have disbursement amounts / loan terms falling into the specified categories
- Eligibility
- The characteristics that borrowers must meet in order to be eligible to receive a loan product
- Flat
- Interest calculation is based on the original loan amount thoughout the loan term rather than on the outstanding balance that the borrower holds
- Full APR
- Price of the loan using Annual Percentage Rate formula, includes the impact of interest, fees, insurance, taxes and compulsory deposit
- Full APR (int fee ins tax dep)
- Price of the loan using Annual Percentage Rate formula, includes the impact of interest, fees, insurance, taxes and compulsory deposit
- Grace Period
- Extra time given to the borrower before loan repayments commence
- Group Lending with Individual Liability
- Lending methodology where borrowers form into groups for other services, but they are not liable for the repayment of each others' loans.
- Included services
- The additional services offered with this product that are included in the price of the loan
- Individual
- Lending methodology where a borrower gets a loan that is not linked to other borrowers. Repayment relies solely on the individual.
- Institution regulated
- Whether the institution is regulated by the central bank or government
- Institutional Type
- Microfinance providers can be categorised into Bank; Cooperative/Credit Union; Non-Bank Financial Institution; Non-Profit Organisation; Rural Bank, or Other.
- Loan Amount
- The disbursement amount of the loan
- Loan Cycle
- The number of previous loans that the borrower has taken for this product
- Loan Purpose
- The purposes for which the loan product can be used, for example for business (income generation) purposes, emergency, consumption, education, housing, agriculture or multiple purpose loans
- Loan Size Range
- Approximately the largest and smallest loan sizes for this product that were approved in the last 12 months, in currency of product
- Loan Term (Months)
- The duration of the loan, i.e. the duration in months between the disbursement date and the final repayment date
- Low Volume Product
- Microloan product with less than 50 borrowers. MFTransparency calculates prices of products which have more than 50 borrowers
- MFT Pricing Calculation
- MFTransparency's standardised reconstruction of the loan showing the borrower's cash flows and impact on price
- Methodology
- Lending methodology employed by the loan product
- Microfinance Institution (MFI)
- An institution providing microfinance products and services to low-income clients.
- Microloan
- Credit products issued by microfinance institutions that fall under a specified size limit. The size varies according to the microfinance market and regulation in each country. Where legislation does not specify an upper size limit for microloans, MFTransparency determines a suitable maximum loan size in conjunction with industry actors.
- Nominal Interest
- The interest rate details as quoted by the institution to the borrower, in annualized terms.
- Non Bank Financial Institution
- NBFI - An institution that provides similar services to those of a Bank, but is licensed under a separate category e.g. due to lower capital requirements, limitations on financial service offerings, or supervision under a different state agency
- Non-Governmental Organisation
- NGO - An organization registered as a nonprofit, typically not regulated by a banking supervisory agency. Its financial services are usually more restricted, usually not including deposit taking.
- Original Repayment Schedule
- The institution's loan documentation presenting details of the loan and repayments.
- Oustanding Portfolio
- An approximation of the outstanding principle for all outstanding client loans, in local currency. This includes current, delinquent and restructured loans. It does not include loans that have been written off, interest receivable or employee loans
- Participation Rate
- The marketshare in terms of borrowers represented by institutions that have become transparent in their prices in that country.
- Portfolio (USD)
- Converts the value of Outstanding Portfolio to USD at the exchange rate at time data was submitted
- Regions active
- The geographic regions where the institution has microcredit operations
- Repayment Frequency
- The regularity of loan repayments by the borrower that are allowed for this product
- Retired Product
- Microloan product that is no longer offered by the institution
- Rural Bank
- Banking institution that targets clients who live and work in non-urban areas and who are generally involved in agricultural-related activities
- Sample
- Examples of real loans given to actual borrowers, used for MFTransparency pricing calculations
- Section 25 Company (India)
- An institution that is registered as a section-25 Company under the Indian Companies Act, 1956
- Self help group
- Lending methodology where a group of 5 to 20 borrowers have some management authority over funds. The groups lend their savings to members, store them in a lockbox, or deposit them in a group bank account in order to leverage a group loan.
- Solidarity group
- Lending methodology where borrowers are in a group of typically 3 - 7 members. Members provide collateral or loan guarantee through a group repayment pledge.
- Spread Index
- Calculates how broad the range of sample prices are, calculated as (Highest - Lowest) / Lowest x 100. A low number indicates a small range of prices for that product
- Total Cost of Credit
- Total amount paid by the borrower for the loan, including all fees and other charges from the lender
- Total Portfolio (USD)
- Converts the value of Outstanding Portfolio to USD at the exchange rate at time data was submitted
- Total Portfolio (nat'l)
- An approximation of the outstanding principle for all outstanding client loans, in local currency. This includes current, delinquent and restructured loans. It does not include loans that have been written off, interest receivable or employee loans
- Transparency Index
- MFTransparency's scale for rating the level of transparency of a true price. It presents the percentage of the loan price that is communicated by the lender's nominal interest rate
- Transparent Pricing Initiative
- Country-by-country projects that collect and disclose details of credit products on offer in each country, with a particular focus on disclosure of the prices paid by borrowers for these products. Details of these loan products are voluntarily disclosed by the microfinance institutions.
- Village banking
- Lending methodology where borrowers form groups of typically 10 - 100 members that are autonomously responsible for leadership, bylaws, bookkeeping, fund management and loan supervision.
