I've found this very interesting game about the European Union's recent crisis, it is actually sponsored by the European Central Bank, you have to control some macroeocnomic variables and see if you achieve first a stabilized economy and then growth; there is even a world ranking, if you think you can solve the Euro crisis, this would be a very nice start
Tuesday, November 29, 2011
The Bolivian microfinance sector is characterized by the inclusion of some of the most recognized MFIs in the region. In recent years, a good deal of the efforts undertaken were focused on extending the application of the regulatory scheme to a larger number of institutions, a project that remains in progress.
The Superintendent of Banks and Financial Entities was the institution responsible for the regulation and supervision of the financial system in Bolivia since 1928. However, owing to the approval of the new constitution, its name was changed on May 7, 2009, to the Financial System Supervisory Authority (ASFI by its Spanish acronym). This change incorporated the functions of control and supervision of economic activities in the securities and insurance sectors.
According to the Law of Banks and Financial Entities, the regulated finance system is composed of intermediary financial banking entities (12) and non-bank intermediary financial entities such as private financial funds (5), open savings and loan cooperatives (25) and mutual savings and loans (8). Of these institutions, only three banks and four private financial funds are specialized in microfinancing. These are grouped into the Association of Financial Entities Specialized in Microfinance (ASOFIN by its Spanish abbreviation), while the private banks are grouped into the Association of Private Banks of Bolivia (ASOBAN by its Spanish abbreviation). The remaining Private Financing Fund (FFP by its Spanish acronym), FFP Fondo de la Comunidad, is focused on distributions to small businesses (MyPES) and individuals, and is the only regulated entity that is not part of ASOFIN.
The microfinance sector also includes Development Finance Institutions (DFIs) or non-governmental organizations, as well as the Social Savings and Loan Cooperatives (CACs by their Spanish acronym). Due to the development of this sector, the ASFI decided to incorporate these under the scope of supervision similar to private financial funds, but with a lower reserve requirement. To date, the figure is around USD 471,400, equivalent to 300,000 special drawing rights (DEG) as of September 11, 2011. The resolution for the DFIs was established in March 2008, while those for Social Savings and Loan Cooperatives (CACs) were established in June of that year. In accordance with the standards for authorization, the process of transformation for institutions of this type consists of two stages, in order to obtain the approval certificate and operating license. To date, there are 16 cooperatives and 9 DFIs that have obtained this approval certificate. They have been supported in this process by the granting of subsidiary lines of credit. The transformation of a private financial fund (FIE) into a bank, and the admission of a new open cooperative (La Merced) also contributed to the development of the sector.
Based on the previous explained developments and some others, Bolivia is ranked as No. 2 in The Economist's global index on business environment for microfinance among 55 countries.
Bolivia, ranked No. 2 in global index on business environment for microfinance
The index -denominated Global Microscope on the Microfinance Business Enviornment- allows countries and regions to be compared across two broad categories: Regulatory Framework and Practices, which examines regulatory and market-entry conditions, and Supporting Institutional Framework, which assesses business practices and client interaction.
The Microscope was originally developed for countries in the Latin American and Caribbean region in 2007 and was expanded into a global study in 2009. Most of the research for this report, which included surveys, interviews and desk analysis, was conducted in the ﬁrst half of 2011.
Peru ranekd atop the Global Microscope for a third straight year, buoyed by an excellent legal framework, sophisticated regulators and a government commitment to use microﬁ nance to expand ﬁnancial access to the poor. Peru deepened its strong foundations in the past year, with new rules to
improve ﬁnancial soundness, and with a proposed law on mobile banking, among the ﬁrst in Latin America. But even Peru was affected by the global stresses in microﬁnance, as levels of non-performing loans (NPLs) rose after some borrowers took on too much debt. Bolivia ﬁnished second in Microscope 2011, up from third a year earlier, helped by better price transparency and disclosure rules
Not so fast...
For example in Forbe's ranking of Microfinance institutions the best Bolivian ranked institution is in place No. 42.
Forbes' first-ever list of the World's Top 50 Microfinance Institutions were chosen from a field of 641 micro-credit providers. The list was prepared by the Microfinance Information Exchange ( www.themix.org) under the direction of Forbes magazine. To qualify, the institutions must have made available their audited financials and must have passed review by a Forbes panel of advisers)
|2||Bandhan (Society and NBFC)||India||108||49||42||1|
|3||Banco do Nordeste||Brazil||46||27||213||25|
|4||Fundación Mundial de la Mujer Bucaramanga||Colombia||58||72||193||1|
|6||Amhara Credit and Savings Institution||Ethiopia||56||126||118||42|
|7||Banco Compartamos, S.A., Institución de Banca Múltiple||Mexico||15||24||295||11|
|8||Association Al Amana for the Promotion of Micro-Enterprises Morocco||Morocco||17||212||133||1|
|9||Fundación Mundo Mujer Popayán||Colombia||53||181||141||1|
|10||Fundación WWB Colombia - Cali||Colombia||27||206||155||4|
|11||Consumer Credit Union 'Economic Partnership'||Russia||82||300||19||1|
|12||Fondation Banque Populaire pour le Micro-Credit||Morocco||59||126||219||1|
|13||Microcredit Foundation of India||India||75||142||7||185|
|14||EKI||Bosnia and Herzegovina||66||102||242||1|
|15||Saadhana Microfin Society||India||263||79||73||1|
|16||Jagorani Chakra Foundation||Bangladesh||136||176||128||1|
|18||Partner||Bosnia and Herzegovina||64||169||230||1|
|20||Caja Municipal de Ahorro y Crédito de Cusco||Peru||48||99||222||119|
|21||Bangladesh Rural Advancement Committee||Bangladesh||10||159||126||205|
|23||Caja Municipal de Ahorro y Crédito de Trujillo||Peru||20||163||220||101|
|23||Sharada's Women's Association for Weaker Section||India||229||207||55||13|
|24||MIKROFIN Banja Luka||Bosnia and Herzegovina||60||240||205||1|
|25||Khan Bank (Agricultural Bank of Mongolia LLP)||Mongolia||19||149||280||59|
|28||Dakahlya Businessmen's Association for Community Development||Egypt||200||215||102||1|
|29||Asmitha Microfin Ltd.||India||80||254||73||111|
|30||Credi Fe Desarrollo Microempresarial S.A.||Ecuador||28||252||206||34|
|31||Dedebit Credit and Savings Institution||Ethiopia||50||246||80||154|
|32||MI-BOSPO Tuzla||Bosnia and Herzegovina||128||120||283||1|
|33||Fundacion Para La Promocion y el Desarrollo||Nicaragua||173||89||171||100|
|35||Shakti Foundation for Disadvantaged Women||Bangladesh||170||221||151||1|
|37||Kazakhstan Loan Fund||Kazakhstan||120||118||320||1|
|38||Integrated Development Foundation||Bangladesh||300||134||140||1|
|39||Microcredit Organization Sunrise||Bosnia and Herzegovina||114||103||341||17|
|40||FINCA - ECU||Ecuador||125||138||264||54|
|41||Caja Municipal de Ahorro y Crédito de Arequipa||Peru||23||126||220||215|
|42||Crédito con Educación Rural||Bolivia||135||152||298||1|
|44||SKS Microfinance Private Limited||India||61||395||141||1|
|45||Development and Employment Fund||Jordan||83||388||135||1|
|46||Programas para la Mujer - Peru||Peru||292||82||242||1|
|47||Kreditimi Rural i Kosoves LLC (formerly Rural Finance Project of Kosovo)||Kosovo||213||158||247||1|
|48||BURO, formerly BURO Tangail||Bangladesh||137||207||186||91|
|49||Opportunity Bank A.D. Podgorica||Serbia||49||234||319||23|
|50||Sanasa Development Bank||Sri Lanka||86||206||93||241|
So what does this mean? Well, there certainly is a very nice environment for the development of MIF institutions in Bolivia, however aspects such as legal risk, oevercrowding of the market, lack of serious administration and others hamper the real potential of Bolivia's development of Microfinance.
Personally I hope that this changes in the near future, so Bolivia would be able to keep its predominant role in this specific sector.