Enabling environment and microfinance institutions: Lessons from Latin America

Abstract

Several examples of ‘graduation’ of microfinance institutions into the regulated financial system are found in Latin America. Although the best-known case is that of BancoSol in Bolivia, others have followed with less notoriety, either because they are too recent to allow an assessment of their regulated performance, or because the graduation process has been somehow stunted. Based on a few selected cases, the paper explores the ‘environmental factors’ that may have enabled, or hampered, the emergence of these specialized microfinance institutions in the regulated world. In addition to BancoSol, the analysis looks into the policy and regulatory elements surrounding the evolution of AMPES/Servicio Crediticio (a non-governmental organization) into Financiera Calpia (a regulated finance company) in El Salvador, and that of ADMIC (an NGO) into Finmicro in Mexico.