Effective interest rate (EIR) for the most representative loan product of the organization during the reporting period.
Effective Interest Rate (EIR) (PI7467)
- Reporting Format Decimal
- Metric Type Metric
- Metric Level Product/Service, Organization
- IRIS Metric Citation IRIS, 2020. Effective Interest Rate (EIR) (PI7467). v5.1.
Footnote
Organizations should footnote all assumptions used.
Usage Guidance
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This metric is intended to capture the rate that converts all the borrower's financial costs for a loan into a single declining balance interest calculation. It includes the effects of interest rates (whether they are calculated on a flat or declining basis), payment schedules, commissions, fees, discounting, and compensating balances.
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Organizations should refer to the tool created by the MFTransparency Organization that provides guidance on EIR calculations: http://www.mftransparency.org/pages/ctp-tool/
Impact Categories & Themes
SDG Goals & Targets
No Poverty
- SDG Target 1.5
- SDG Target 1.4
Gender Equality
- SDG Target 5.5
Decent Work and Economic Growth
- SDG Target 8.1
- SDG Target 8.2
- SDG Target 8.3
- SDG Target 8.10
Industry, Innovation and Infrastructure
- SDG Target 9.3
Reduced Inequality
- SDG Target 10.1
- SDG Target 10.2
- SDG Target 10.3
Sustainable Cities and Communities
- SDG Target 11.5
Metric History
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January 2020 - IRIS v5.1 Released
No change.
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May 2019 - IRIS v5.0 Released
No change.
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March 2016 - IRIS v4.0 Released (current version)
No change.
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March 2014 - IRIS v3.0 Released
Material change. Metric definition modified to provide clarity based on best practices via the Microfinance Information Exchange (MIX).
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November 2011 - IRIS v2.2 Released
No change.
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February 2011 - IRIS v2.1 Released
No change.
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September 2010 - IRIS v2.0 Released
Immaterial change. IRIS ID changed due to framework upgrade. Minor revision to definition language for clarity.
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September 2009 - IRIS v1.0 Released
New metric. Effective Interest Rate (M23.1) developed via Original IRIS Working Group.