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CREDIT RATING OF NGOs Parameter 1 Character Basis of Assessment Marks Card 25

1. Representative nature i) NGO located and also of the conditions of the functioning in the same area local area and the community
ii) NGO based elsewhere but functioning in the area iii) NGO based elsewhere and new to the area iv) Newly established NGO

3 2 1

v) No. of villages covered under various programmes

Above 26 to 11 TO 1 TO 50 50 25 10 4 4 2 1

vi) No. of families covered under development programmes: Above 2500 1000 to 2500 4 3

500 to 1000
Less than 500


2. Interest evinced by the i) Meets frequently: 4 times or NGO governing body / more in a year Management committee ii) Meetings are well attended average attendance more than 80 per cent iii) Expertise of the NGO government body and the Management committee 3. Commitment for socio- i) Strong focus on the economic development development of the poor ii) Special thrust on women iii) works predominantly in backward/tribal areas iv) Empowerment as main criteria

2 2 2 2

4. Transparency in operations II Capacity 1. Organisational capacity and managerial competence

Publication of annual reports and audited accounts i) Availability of experienced and professional staff
ii) Adequacy of infrastructure


3 (0-3)

3 (0-3)

2. Trained manpower i) Adequacy of manpower trained in financial intermediation with the agency ii) In-hour training arrangements iii) Arrangements for training of staff and executives iv) Whether the NGO is undertaking training of any other NGOs or SHGs

4 (0-4)

1 1

3. Rapport with the i) Relationship with the banks/ local agencies financial institutions ii) Agency/ CEO represented in any committee set up by the government

4 (0-4) 1

4. Proficiency of the CEO and the key managerial staff in microfinance

iii) Report with the local administration iv) Agency involved in government sponsored / supported programmes -


5 (0-5)

III Core Competency 1. Experience/ proficiency in group related savings and credit activities. i) Whether the agency has adequate experience in savings and credit programmes

20 4 (04)

ii) Experience in promotion and nurturing of SHGs and linking with the banks. iii) Experience in other innovative credit delivery mechanism iv) Various types of promotional support provided by the agency v) On time repayment performance by members to the Groups/NGO

4 (04)
4 (04) 4 (04) 4 (04)

IV Credit Thrift Management


1. i) Existing and sustainable 6 Sustainability ii) Sustainability expected in less three years 4 of operation iii) Sustainability expected above three years 2 iv) Lack of sustainability 0 Financial i) Ability of the NGO to raise adequate 3 (0-3) Management resources for the programme ii) Application of internal resources Other 3 (0-3) than borrowings iii) Satisfactory Credit report from Banks / Fls 3 (0-3) iv) Low level of over dues to total outstanding 3 (0-3) v) Good book keeping practices 3 (0-3)

3. Audit

i) upto-date audited with no serious observations. ii) Audit in arrears for more than one year with no serious observations.

4 2

4. Dependence on donors to meet routine operational expenses

iii) Audit in arrears for more than one year Extent of dependence on the donors funds

5 (0-5)



The credit rating is done on a scale of 100 The appraising officer of the bank need to critically assess the parameters as specified under capacity, ore competency and credit thrift management. It is true that no NGO can

achieve a scale of 100. A good NGO would be in a position

to score a minimum of 75 and hence for all practical purposes an NGO scoring at least 60 per cent of the highest achievable score of 75 could considered credit safety by the banks. In other words, an NGO scoring less than 40 marks would not qualify for any assistance from the banks.