The Caracas, Venezuela based Corporacion Andina de Fomento (CAF) has granted loans worth USD 29.2 million to support the financial reinforcement of six Bolivian microfinance institutions. CAF president and CEO Enrique Garcia said the loans were approved for “institutional and business strengthening, promotion of a positive business climate, generation of employment and efficient response to demand for basic services for the population.”  The largest portion USD 10 million went to Banco Los Andes ProCredit, followed by USD 6.5 million to Banco Bisa, USD 5 million to each Banco Solidario and Banco Economico, and lastly the non banking financial institutions Crecer, USD 2 million and Fondo Privado Ecofuturo, USD 700,000.

Founded in 1970, with 2007 assets of USD 12.6 billion, CAF is a multilateral financial institution owned by a 17 country conglomerate of government shareholders from Central and South America. CAF serves both public and private sectors, with a mission is to promote the sustainable development of its shareholder countries and regional integration.  

Banco Los Andes ProCredit, was founded in 1995 with the aim is to contribute to the socio-economic development of people with scarce resources through financial services. The CEO Stefan Queck told Business News Americas the bank will seek to grow its loan book 28% this year to USD 130 million compared to last year.  The USD 10 million loan capital from CAF will be used to bolster its market position by expanding the volume of loans to micro, small and medium-sized enterprises (MSMEs).

Similar objectives are held by Banco Solidario and Banco Economico with plans to invest the capital in market position through growth in lending to MSMEs.  Banco Solidario began in 1995 with an exclusive focus on microfinance, growing to a 2007 loan portfolio of USD 224 million.  Whereas, Banco Economico started as a traditional commercial banking institution in 1982, but has transformed operations over the past several years to include microfinance services offered to the urban poor of La Paz and Santa Cruz, Bolivia.

Banco BISA also started as a more traditional bank, functioning as the banking and lending arm of the BISA financial group.  In conjunction with loans and savings, the latest addition of services adapted to microfinance activities by Banco BISA is Bisa Móvil, a mobile banking service enabling clients to make payments, transfers and requests for information. The USD 6.5 million from CAF has been earmarked to grow both the capacity of Bisa Móvil, and strengthen the capital position of the banks’ lending to MSMEs.

The CAF strategy also covers Non-Governmental Organization (NGO) microfinance institutions, with regard to both Crecer and Fondo Privado Ecofuturo. Crecer was founded in 1990 and utilizes the village banking methodology. The USD 2 million capital injection will be utilized to supporting groups of people who individually do not have the capacity to enter the traditional financial system. Fondo Privado Ecofuturo was created in 1999 by a group of financial NGOs together with the Swiss Government, and will be looking for the loan capital to maintain its growth and consolidate its position in the sector.

By Brett Rudder, Research Assistant

Additional Resources

CAF: home

CAF: Bolivian private sector receives US$50 million for power generation and financial strengthening

Banco Los Andes: home, Mix Market Profile

Banco Bisa: home

Banco Bisa: Bisa Móvil, mobile banking service, case study by TechRepublic

Banco Solidario: home, Micro-Credit home, Mix Market Profile

Banco Economico: home

Crecer: home , Mix Market Profile

Fondo Privado Ecofuturo: Mix Market Profile

Business News Americas: CAF lends US$29.2mn to financial institutions

Business News Americas: Banco ProCredit aims for 28% loan increase this year