Discussion Paper No.1: Working Towards a Common Consensus on the Definition of Tiers in Microfinance

Investors in Tier 2/3 MFIs Action Group Discussion Paper No.1,  April 2013. 

The microfinance sector has evolved considerably over the last years. In some areas though, the sector still lacks clarity of key concepts and definitions. One of the important indicators in the microfinance sector is the so called “tier” a microfinance institution (“MFI”) belongs to. People within the industry commonly refer to tier 1, tier 2, tier 3 and sometimes even tier 4 MFI to describe which kind of microfinance institution they are talking about.