Financial Institutions

Credit Evaluation and Support

All financial institutions are required to have an external credit rating, either by one of MFX partner agencies or a commercial rating agency.

For rating institutions, MFX uses a financial strength rating derived from our partners’ standard rating methodology. (e.g. Microfinanza’s Basic MFI Requirements). If the institution has a rating from a non-partner rating agency, this can be adapted for MFX’s purposes.

Financial institution clients are generally required to place cash collateral, regardless of rating, unless the institution has a guarantee from a rated entity that can be classified as a “Fund“.

Standard collateral terms are:

Financial Institutions (including MFI’s and local Banks)

All financial institutions are required to have an external credit rating, either by one of MFX’s partner agencies or a commercial rating agency.

For rating institutions, MFX uses a financial strength rating derived from our partners’ standard rating methodology. (e.g. Microfinanza’s Basic MFI Requirements). If the institution has a rating from a non-partner rating agency, this can be adapted for MFX’s purposes.

Financial institution clients are generally required to place cash collateral, regardless of rating, unless the institution has a guarantee from a rated entity that can be classified as a “Fund“.

Standard collateral terms are:

Initial margin: 5% of Notional

Variable margin: Mark-to-market

Minimum transfer amount: 1% of notional

 

Renewable Energy Sector

All non “Fund” clients of MFX in this space are not required to have an external credit rating. However these clients are required to post cash collateral or have credit insurance (secured by MFX and charged to the client).

 

 

 

 

For more information, or to begin the process of becoming a client please contact us.