Creating a Microfinance Bank in Peru: ACP's Transformation to Mibanco

Publication Date: Oct 2001
Published by: USAID - Microenterprise Best Practices (MBP) Project
Document Type: Paper

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Can commercialization dilute social focus?

This paper presents the case of Acción Communitaria del Perú (ACP) in two sections. The first section focuses on the evolution of ACP from a NGO working on several aspects of community development, to a commercial bank (Mibanco) having a strategic focus on micro enterprise development. The highlights of this transformation are:

• Rapid growth of ACP’s microcredit program from 1990-1998;
• Growth planning and evaluation of different options such as “Financiera” and Entidades de Desarrollo para la Pequeña y Microempresa (EDPYMEs);
• Formation of Mibanco – first full service microfinance in Peru in 1998;
• Structural, financial and operational transformation.

• Shift in poverty levels of the clientele – the new entrants were poorer;
• Increased transaction costs for clients as a result of more paperwork;
• Strained client relationships due to a more rigorous follow-up;
• Loan terms better suited to the poor, despite higher transaction costs;
• Increased choices for the clients.

The paper concludes with the observation that commercialization does not necessarily lead to mission drift.