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Group dynamics, gender and microfinance in Bolivia


  • Carmen Velasco

    (FINRURAL, La Paz)

  • Reynaldo Marconi

    (PROMUJER, Bolivia)


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.

Suggested Citation

  • Carmen Velasco & Reynaldo Marconi, 2004. "Group dynamics, gender and microfinance in Bolivia," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(3), pages 519-528.
  • Handle: RePEc:wly:jintdv:v:16:y:2004:i:3:p:519-528 DOI: 10.1002/jid.1089

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    References listed on IDEAS

    1. Daniel Hardy & Paul Holden & Vassili Prokopenko, 2003. "Microfinance institutions and public policy," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(3), pages 147-158.
    2. Binswanger, Hans P, 1981. "Attitudes toward Risk: Theoretical Implications of an Experiment in Rural India," Economic Journal, Royal Economic Society, vol. 91(364), pages 867-890, December.
    3. 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 367-393, May.
    4. 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.
    5. P. Mosley, 2001. "Microfinance and Poverty in Bolivia," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 101-132.
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    Cited by:

    1. Milanov, Hana & Justo, Rachida & Bradley, Steven W., 2015. "Making the most of group relationships: The role of gender and boundary effects in microcredit groups," Journal of Business Venturing, Elsevier, vol. 30(6), pages 822-838.
    2. Peprah, James Atta & Koomson, Isaac, 2014. "Addiction to Microcredit: An Obstacle to Social and Financial Mobility," MPRA Paper 57894, University Library of Munich, Germany.

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