Case Study

Commercialization of Microfinance: The Cases of Banco Económico and Fondo Financiero Privado FA$$IL, Bolivia

Analyzing opportunities in offering commercial services to small and medium-sized clients

The commercialization of microfinance refers to the recent trend of privately owned financial institutions expanding their services into the microenterprise sector (primarily motivated by the potential increase in their profitability). Banco Económico and Fondo Financiero Privado FA$$IL (FA$$IL) represent two illustrative cases of the commercialization of microfinance. Both institutions were founded by private investors from the non-financial sector in Santa Cruz de la Sierra, Bolivia. Although Banco Económico is a full-service commercial bank, FA$$IL is a specialized finance company (or non-bank financial institution) offering consumer and microenterprise credit and limited deposit and payment services. The case studies presented in this document clearly illustrate the internal and external factors that have encouraged both financial institutions to penetrate the microenterprise market, and they present interesting observations concerning services offered, financial structures, and business strategies.

[Author's abstract]

About this Publication

By Poyo, J. & Young, R.
Published