What Works in Microfinance: Dominican Republic Micro-lender Shows That Local Managers Are the Difference

“ADOPEM,” the Dominican Republic affiliate of Women’s World Banking, is one of the most successful micro-lenders in the country. It has an $8 million USD loan portfolio and about 300 employees, and serves nearly half of all Dominican microcredit borrowers. ADOPEM has posted double-digit ROE for years.

How does ADOPEM achieve such high levels of performance?

1) Strong executive management: CEO Mercedes Canalda de Beras-Gocio learned the business from her mother who founded what was then a little non-profit in 1982.
2) Weak competition: the only other significant microfinance player in the DR is BancoADEMI which works up-market from ADOPEM, issuing larger loans. Otherwise, the DR is estimated to have approximately 30 players, none of which have significant capitalization and professional management.
3) Clear career path: middle managers often begun their careers as ADOPEM clients. This bears repeating: impoverished women that started with a micro-loan now manage million dollar loan portfolios with thousands of customers and dozens of employees.
4) Loan officer corps: ADOPEM solidly beats the industry benchmark with a loan-officer-to-client-ratio of 1 to 400. Some loan officers manage more than 800 accounts. This success is due to rigorous loan officer training, a field-operations focus, and proper incentives based on both delinquency and yield. Loan officers can earn up to an additional 50% of their monthly salaries with performance incentives. All this combined with a clear career path into management, and this is a very motivated bunch.
5) Strong Partners: again and again, Women’s World Banking distinguishes itself as a top ‘network’ providing management consultancy, knowledge and cross-training of successful micro-lenders worldwide.

Additional Resources
1) Consultative Group to Assist the Poor (CGAP): "Dominican Republic."
2) Inter-American Development Bank (IDB): "Dominican Women Lead Lending." pg. 11
3) Women’s World Banking (WWB): "ADOPEM."

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