Specialized banking services for small scale entrepreneurs: the case of Mibanco, Peru

Purpose - The purpose of this paper is to describe Mibanco's challenges in offering credit to individuals who have never had access to the formal banking system in Peru. The purpose of the case is to explain how Mibanco's innovative products and services have contributed to its success in enabling thousands of Peruvians to gain access to banking services. The paper also describes Mibanco's latest adaptations in response to growing competition to provide banking services to the lower income segments of the market. Design/methodology/approach - The case study research methodology combines primary data from key informant interviews with Mibanco's CEO Rafael Llosa and other senior executives as well as academics and investment professionals familiar with Mibanco's operations. Secondary data were also collected from Mibanco's annual reports and other published sources. Findings - The paper describes Mibanco's innovations in overcoming constraints in its operating environment. The case also documents the important role that Mibanco has played in transforming the Peruvian financial market through its pioneering development of financial products and services for the poor. Originality/value - The paper describes Mibanco's role in influencing the Peruvian financial system as a whole and specifies the strategies that Mibanco's executive management has established to overcome the risks and challenges faced by the institution.