The International Development Bank (IDB) on Friday highlighted Peru's "highly favorable environment" for the expansion of microfinance institutions within the framework of the 1st International Microfinance Forum held in Lima.
"It is clear —by all indexes and agencies that have assessed the country's economic context— that Peru offers a highly favorable environment for
microfinance institutions," IDB Senior Research Economist Veronica Frisancho said.
"And, from that point of view, opportunities are a given," she added.
However, the IDB specialist stressed Peru's microfinance institutions need to go beyond their usual circle of clients and start venturing into rural, underserved and underbanked areas.
To this end, Frisancho explained these organizations will have to innovate and find new creditworthiness assessments, unlike their traditional, income info-based ones.
In this sense, she referred to the Big Data (massive data intelligence) trend and international evaluation criteria based on other factors like personality and behavior traits, as well as credit applicants' business sector.
More profitable than banks
The IDB researcher also underlined the Peruvian microfinance sector's
business attractiveness and profit margins, which are higher than those of banks.
Banks are thus trying to enter this sector to compete with micro-credit institutions.
Micro credits
Microfinance system loans in the Inca nation totaled S/36.037 billion (about US$11.02 billion) at the end of 2016, a 13.12% rise over December 2015, Peru's Association of Microfinance Institutions (Asomif Peru) revealed.
Credits for micro enterprises grew 9.68% in the same period (S/4,376 or US$1,338.6 average loan), whereas those for small enterprises expanded 13.52%.
Microfinance field debtors also increased 11.54% during the same period, reaching 4.2 million nationwide by end-2016.
Veronica Frisancho participated in the 1st International Microfinance Forum as a speaker. Organized by Asomif Peru, the event concludes today.
(END) MDV/JJN/DHT/MVB