Mibanco, Peru: Profitable Microfinance Outreach, with Lessons for Asia

Abstract

T his paper presents the case of Mibanco (“my bank”), a leading microfinance commercial bank in Peru that grew out of the nongovernment organization Acción Comunitaria del Perú (ACP). ACP initially had to go through a difficult period because of macroeconomic instability in the country, but with the return of stability grew rapidly in the late 1990s. It was transformed into a commercial bank in May 1998. Mibanco experienced strong growth, expanded its depth and breadth of outreach and scope of services, and thereby enhanced its value to clients during the posttransformation period. Its loyalty to the original mission of serving the poor and low-income households and their microenterprises is reflected partly in the pro-poor housing loan product (Micasa—”my home”) it introduced in 2000. Mibanco is also expanding its operations from urban to rural areas. The bank has diversified its sources of funds and increased its reliance on deposits. It also tapped capital markets through a bond issue in 2002. The story of Mibanco provides important lessons for policymakers, practitioners, and funding agencies; it is a story of commercial microfinance with a human face. Microfinance institutions in Asia that focus largely on the rural sector can benefit from its lessons.