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Group dynamics, gender and microfinance in Bolivia

  • Carmen Velasco

    (FINRURAL, La Paz)

  • Reynaldo Marconi

    (PROMUJER, Bolivia)

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    This paper examines the wider impacts, or externalities, of microfinance in Bolivia, an environment in which the loss of confidence in the formal banking system and the proactive role of the Superintendencia de Bancos in converting NGOs into deposit-taking institutions have been positive factors. Our focus is on the group-lending technology of ProMujer, which practises a 'credit plus' technology in which training, health and advisory services for women only are linked with lending (and savings services through FIE). There is some preliminary evidence that such groups have achieved the externality of stimulating collective public action outside of the immediate microfinance context (for example by lobbying for better public services or changes in policy); such growth seems to happen most readily where the group has collective experience of adversity, and|or where intragroup equality is high. They also have exemplary repayment rates, which-unlike those of most other microfinance institutions-did not fall off during the recent recession. This creates a second externality for the economy as a whole-a contribution to macro-economic stability. We hypothesise that the chain of causation goes from ProMujer's 'credit plus' ancillary services, to client loyalty to the institution, to high repayment rates, to ability to expand lending and investment. Copyright © 2004 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/jid.1089
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    Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

    Volume (Year): 16 (2004)
    Issue (Month): 3 ()
    Pages: 519-528

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    Handle: RePEc:wly:jintdv:v:16:y:2004:i:3:p:519-528
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    1. Newman, John & Jorgensen, Steen & Pradhan, Menno, 1991. "How Did Workers Benefit from Bolivia's Emergency Social Fund?," World Bank Economic Review, World Bank Group, vol. 5(2), pages 367-93, May.
    2. Patten, Richard H. & Rosengard, Jay k. & Johnston, Don JR., 2001. "Microfinance Success Amidst Macroeconomic Failure: The Experience of Bank Rakyat Indonesia During the East Asian Crisis," World Development, Elsevier, vol. 29(6), pages 1057-1069, June.
    3. Binswanger, Hans P, 1981. "Attitudes toward Risk: Theoretical Implications of an Experiment in Rural India," Economic Journal, Royal Economic Society, vol. 91(364), pages 867-90, December.
    4. P. Mosley, 2001. "Microfinance and Poverty in Bolivia," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 101-132.
    5. International Monetary Fund, 2002. "Microfinance Institutions and Public Policy," IMF Working Papers 02/159, International Monetary Fund.
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