IDEAS home Printed from
   My bibliography  Save this article

Bolivia during the global crisis 1998-2004: towards a 'macroeconomics of microfinance'


  • Reynaldo Marconi

    (FINRURAL, La Paz)

  • Paul Mosley

    (Department of Economics, University of Sheffield, Sheffield, UK)


The macroeconomic role of microfinance appears to have varied enormously between country cases, as notably exposed by the recent wave of macroeconomic crises. For example, in Indonesia in the late 1990s microfinance appears to have played a notably counter-cyclical role, whereas in Bolivia, the main focus of this paper, its role was in most cases to intensify rather than restrain the crisis. We find part of the explanation for this in the behaviour of government towards microfinance (much more conciliatory towards defaulting debtors in the Bolivian case) and in the structure of demand (unfavourable, in Bolivia, to the distribution and service sector which is the main market for microenterprise). However, closer examination of the Bolivian case suggests that institutional design also played an important role. In particular, those organizations which provided savings, training and quasi-insurance services bucked the trend of rising default rates and falling lending through the crisis and did particularly well, whereas the new breed of consumer-credit microfinance organizations did particularly badly and in several cases went out of business. This experience suggests, in particular, that it may be appropriate to call into question the fashionable 'minimalist' (credit-only) model of microfinance, as certainly in Bolivia it was principally the credit-plus institutions which proved more financially disciplined and more resilient to crisis. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Reynaldo Marconi & Paul Mosley, 2006. "Bolivia during the global crisis 1998-2004: towards a 'macroeconomics of microfinance'," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(2), pages 237-261.
  • Handle: RePEc:wly:jintdv:v:18:y:2006:i:2:p:237-261 DOI: 10.1002/jid.1218

    Download full text from publisher

    File URL:
    File Function: Link to full text; subscription required
    Download Restriction: no

    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. 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.
    3. 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.
    4. P. Mosley, 2001. "Microfinance and Poverty in Bolivia," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 101-132.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. M J Roa Garcia, 2016. "Can financial inclusion and financial stability go hand in hand?," Economic Issues Journal Articles, Economic Issues, vol. 21(2), pages 81-103, September.
    2. Alimukhamedova, Nargiza & Hanousek, Jan, 2015. "What Do We Know about Microfinance at Macro Glance?," CEPR Discussion Papers 10484, C.E.P.R. Discussion Papers.
    3. Muhammad Zubair & Attiya Yasmin Javid, 2015. "The Role of Subsidy Uncertainty in Mission Drift of Microfinance Institutions of Asia," PIDE-Working Papers 2015:123, Pakistan Institute of Development Economics.
    4. Tchakoute-Tchuigoua, Hubert, 2012. "Active risk management and loan contract terms: Evidence from rated microfinance institutions," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(4), pages 427-437.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:18:y:2006:i:2:p:237-261. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.