Indicadores de microfinanzas en América Latina: rentabilidad, riesgo y regulación
By Sergio Navajas, Enrique Navarrete, Lilian Simbaqueba, Mario Cuevas, Gehiner Salamanca (09/06, MSM-134, En, Es) See also Microenterprise
This publication is available only in Spanish
Currently, there is a lack of quantitative research on the risks and returns associated with microfinance institutions (MFI), especially in comparison with the rest of the financial system. Such analysis would be particularly useful at a point where, aside from the mainstreaming process that is underway, regulatory and supervisory bodies of the region are starting to adapt their processes to the Basel II accord. This accord allows the introduction of detailed risk measurement methodologies that might be utilized, among other things, to set minimum capital requirements for financial institutions.
This paper provides a rigorous analysis of the risks associated with microfinance both at an aggregate level as well as at the level of individual MFI portfolios. To this end, the paper analyzes the performance of financial institutions involved in microfinance lending in six Latin American countries (Bolivia, Colombia, Ecuador, El Salvador, Peru and Nicaragua) vis-a-vis the rest of the financial system. Econometric tools are applied to the analysis of the risk-return relationship of those institutions. Following the principles recommended in the Basel II accord, estimation of provisioning and capital requirements is carried out for four MFIs, comparing the current systems with the type of requirements that will eventually apply.
The results are encouraging and confirm that microfinance lending can be a profitable . This study also shows the feasibility of applying the kind of risk measurement tools recommended by Basel II in the context of microfinance portfolios, identifying strengths and weaknesses of such tools.
The opinions expressed herein are those of the author(s) and do not necessarily represent the official position of the Inter-American Development Bank
Permission is granted to reproduce this paper in whole or in part for noncommercial purposes only and with proper attribution to the author(s), the Sustainable Development Department, and the Inter-American Development Bank.
Last updated: 05/08/07
