CGAP first financial transparency award

What is the CGAP Financial Transparency Award?
CGAP is currently accepting applications for the Financial Transparency Award from microfinance providers. The award will recognize microfinance providers who present comprehensive annual financial reports for the latest fiscal year. Awardees will receive a plaque at an exclusive UN Year of Microcredit (YOM) event and receive a token cash award of $5,000-$10,000. In addition, winners will be recognized on the CGAP and MIX web sites and in a special CGAP and MIX financial transparency report. Awardees will also earn the right to use a CGAP Transparency Award logo in promotional materials. Awards will be presented between January and March 2005.

Who can apply?
The competition is open to all formal regulated and non-regulated financial institutions and non-governmental organizations that offer microfinance services. To qualify for the competition, applicants should complete a simple application form and post their 2003 or 2004 audited financial statements on the MIX market by the closing date, 15 November 2004.

How to apply?
1. Applicants complete a simple application form. The deadline for applications is 15 November 2004.
Forms can be downloaded from: http://www.cgap.org/priorities/financial_transparency.html
2. Applicants post their audited financial statements on the MIX market by 15 November 2004. The MIX market can be accessed at: http://www.mixmarket.org
For additional questions about the application, please email: Nicole at cgap@worldbank.org citing the CGAP Financial Transparency Award.

Selection Criteria
The CGAP Financial Transparency award is designed to promote greater transparency in annual financial reporting by recognizing excellence in disclosure. It is not intended to reward financial results. Award criteria will therefore not consider such performance indicators as return on assets, portfolio at risk, or operating efficiency, other than to note that these indicators are present. It will focus on comprehensive reporting to enhance financial transparency. CGAP will review the applicants' financial statements for compliance with IAS1 Disclosure requirements and the revised Disclosure Guidelines for Financial Reporting by Microfinance Institutions. All MFIs that meet the disclosure requirements will be judged as winners. Selection of awardees will be made by 30 November 2004. (Note: For the first year of the Transparency Award, CGAP Disclosure Guidelines Section 8 will not be used in the judging criteria.)

What are the Disclosure Guidelines for Financial Reporting by MFIs?
The management of microfinance operations is increasingly becoming more professional. The push for transparency by donors, investors, and regulators has encouraged microfinance providers to report their financial performance more regularly, make their financial reports more accessible, and present them using standardized terms and indicators. However, only a handful of microfinance providers include enough information to comply with International Financial Reporting Standards (IFRS) and industry-specific disclosure guidelines. Industry-specific disclosure requires certain information in addition to that required by IFRS to permit a fair assessment of the profitability and asset quality of microfinance operations.
To help address this problem, a group of sponsors, including the donors who make up the Consultative Group to Assist the Poor (CGAP) and the members of the Small Enterprise Education and Promotion Network (SEEP), have developed disclosure guidelines to specify information that should be included in MFI financial reporting. Detailed information on these guidelines is available at: www.cgap.org/docs/Guideline_disclosure.pdf).