The refreshed Transparent Pricing Initiative in Bolivia has published standardized pricing data from 18 institutions, representing an estimated 94% of Bolivia’s active micro loan borrowers. The refreshed data collected in 2013/14 was delivered in partnership with Planet Rating. The pricing data voluntarily submitted by the industry covers the vast majority of the Bolivian microfinance market, representing 90% of the market gross loan portfolio.Microfinance in Bolivia
The microfinance sector in Bolivia originated in the early 1980s when microcredit programs were set up by NGOs to tackle the country’s economic crisis. The Bolivian microfinance industry is considered a case study for how to build an industry that survives a variety of crises, both internal to the sector (e.g, over-indebtedness) and external (e.g, economic fluctuations).
The microfinance sector in Bolivia is an integral part of the mainstream financial system. It has a high market penetration, a diverse range of institution types and product types, and has achieved high levels of efficiency and sustainability. Commercial banks, private financial funds (PFFs), cooperatives, mutual saving and loan societies and NGOs are the key institutional players in the delivery of microfinance services.
The regulatory environment governing the Bolivian microfinance market is characterized by a mixture of licensed and non-licensed microfinance service providers. The Central Bank of Bolivia plays the crucial role in maintaining the overall soundness of the financial sector, and the Authority of Supervision of the Financial System (ASFS) is the relevant authority responsible for licensing and regulating financial institutions in Bolivia. Specific financial sector consumer protection legislation was not included in the overall consumer protection and competition decree, enacted in 2008 via the supreme decree No. 29519, however the ASFS has adopted disclosure standards for financial entities providing microfinance services. These disclosure standards focus on the terms and conditions of loan agreements, in particular the interest rate, fees and charges. The disclosure standard requires all regulated MFIs to disclose their prices, expressed as Annual Percentage Rate (APR), in all loan documentation and agreements.
Self-regulation of the microfinance industry in Bolivia is also advanced through the national microfinance network – the Association of Financial Entities Specialized in Microfinance (ASOFIN). ASOFIN plays an important role among regulated MFIs in promoting ethical activity in member institutions and advising on policy issues, helping to build a sound microfinance sector.
The Price Graph for Bolivia is a model example of the price curve explained and documented extensively by MFTransparency. As can be seen, microloan prices are significantly higher for smaller loans than for relatively larger loans. These higher prices for smaller loans are most likely due to the high costs associated with offering them. The evidence in Bolivia, with its long history of maturation and competition and with its transparent pricing legislation, shows that the market is operating much like a real market. In such an open and competitive market, prices are generally higher on the smallest loans without profits also being higher on the smallest loans.
|Institution||# Borrowers||Portfolio (US$)||Products||Transp. Index||Participating Since||Age of Data|
|Banco FIE||231,100||569,322,000||6||56||2010-Oct||80 mos.|
|Coop Fatima||6,300||44,280,000||7||76||2010-Oct||121 mos.|
|Fassil FFP||57,600||325,081,000||5||61||2010-Oct||80 mos.|
|ProMujer BOL||115,200||50,753,000||3||68||2010-Oct||80 mos.|