MICROCAPITAL BRIEF: As Microfinance in Peru Continues to Grow, BBVA Continental to Acquire Financiera Confianza

The Daily Finance newspaper of the US reports that Peru’s highly competitive microlending market has helped drop interest rates while increasing average loan size, which stands at USD 1,300 as of 2009, an increase from approximately USD 1,000 in 2006, according to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse. Some of Peru’s microfinance players such as MiBanco’s management company, Grupo ACP, are preparing to expand into Brazil, while BBVA Continental, a subsidiary of multinational bank BBVA of Spain, is in the last stages of purchasing Financiera Confianza, another MFI founded in 1992 [1]. As of June 2010, Financiera Confianza reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, USD 147 million in assets, a gross loan portfolio of USD 114 million, 73,000 active borrowers, return on assets of 0.38 percent and return on equity of 2.26 percent.

About Mibanco: Banco de la Microempresa SA (Mibanco), created in 1998, is a private Peruvian bank that aims to assist the development of micro- and small enterprises (MSEs). Its strategy is to target markets where demand for micro-credit is highest and supply weakest, mainly focusing on the Lima-Callao area. Mibanco offers both lending and savings products and employs both individual and solidarity group lending methodologies. Loans are offered for working capital and fixed asset purchases. Loan sizes range from the equivalent of USD 100 to USD 100,000, with loan terms of 3 to 60 months and interest rates ranging from 25 percent to 50 percent per year. As of mid-year 2010, ” Mibanco reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 1.42 billion, a gross loan portfolio of USD 1.18 billion, 390,360 active borrowers, return on assets of 2.65 percent and a return on equity of 31.29 percent.

About Financiera Confianza: Financiera Confianza is a microfinance institution that was founded in Peru in 1992 as the Entrepreneurial Development Program of the US-based Inter-American Development Bank (IADB) and the nongovernmental organization (NGO) Servicios Educativos Promocion y Apoyo Rural (SEPAR) of Peru. In 1998, the program became a financial institution and changed its name to Epdyme Confianza. In 2009, it again changed its name to Financiera Confianza. As of June 2010, Financiera Confianza reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, USD 147 million in assets, a gross loan portfolio of USD 114 million, 73,000 active borrowers, return on assets of 0.38 percent and return on equity of 2.26 percent.

By Diana Baide, Research Assistant

[1] Daily Finance. “In Peru, Tiny Loans Add Up to Big Business” by Emily Schmall

http://www.dailyfinance.com/story/credit/in-peru-tiny-loans-add-up-to-big-business/19699783/

MicroCapital. “MICROCAPITAL BRIEF: Peru Remains on Top of ‘Global Microscope on the Microfinance Business Environment 2010′ Survey by the Economist Intelligence Unit” by Trevor Kwong, 10 October 2010

https://www.microcapital.org/microcapital-brief-peru-remains-on-top-of-global-microscope-on-the-microfinance-business-environment-2010-survey-by-the-economist-intelligence-unit/

MicroCapital’s Microfinance Universe profile: MiBanco

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mibanco

MicroCapital’s Microfinance Universe profile: Financiera Confianza

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Financiera+Confianza

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