Category: Banks. Country: Bolivia.
In 1984, a group of Bolivian entrepreneurs linked to the micro-enterprise sector in the country asked Accion Internacional Tecnica (AITEC) from Cambridge, MA, to explore the opportunity to create a non-profit institution that would support the development of micro enterprises in their country. The study concluded, among other things, that the lack of access to resources, and chiefly the lack of access to credit through the formal financial system was the main factor limiting micro enterprise growth. From that perspective, on November 17, 1986, international and Bolivian investors founded the Fundacion para Promocion y el Desarrollo de la Microempresa (PRODEM) as a Non Governmental Organization (NGO). This entity provided small working capital loans to groups of three or more people dedicated to similar activities who were jointly and severally liable for and guarantors of their obligations. As of January 1992, Fundacion para Promocion y el Desarrollo de la Microempresa had a portfolio of 17,000 clients with loans amounting to 4 million dollars, and five branches located in La Paz, El Alto, Cochabamba and Santa Cruz. At that point, the positive development of Fundacion para Promocion y el Desarrollo de la Microempresa and the existence of huge unsatisfied demand for financial services were the main reasons that led the Board of the institution to expand its activities to meet credit demand in the large and growing sector of micro enterprises. The most promising alternative and most viable instrument to reach this objective and overcome the limitations arising from the legal and financial structure of an NGO was the establishment in 1992 of a commercial bank that became Banco Solidario S.A. After over a decade in business, BancoSol has disbursed more than US$ 1,000 million to more than a million micro-enterprise projects. Currently, the Bank has about 50,000 clients who represent a total portfolio more than US$ 82 million. The Bank is present in five cities (La Paz, Cochabamba, Santa Cruz, Oruro and Sucre) through a network of 35 branches. Entrepreneurs with a small capital base but with dynamic adjustment capabilities are the core clientele for BancoSol. Women play a major role in number and in amount of outstanding loans they account for 63% of BancoSol clients and represent 53% of the loan portfolio. Most of the clients are young, with a predominant age group between 35 and 40 yrs, and have low levels of education. BancoSol clients operate in the informal economy, which contributes more than 20% of GDP and generates employment for over 65% of the employed population. There are approximately 800.000 micro enterprises, largely urban, that form part of this informal economy and generate over 1.7 million jobs for the economically active population.
Address: Calle Nicolas Acosta No. 289, P.O. Box: 13176, La Paz, Phone: 591 2 2484242
