BancoSol Espanol

Economics and Sociology
Occasional Paper No. 2345

BANCOSOL
El reto del crecimiento en organizaciones de microfinanzas
por

Claudio González Vega
Mark Schreiner
Richard L. Meyer
Jorge Rodríguez Meza
y
Sergio Navajas

Mayo de 1996
Versión revisada: agosto de 1996
Traducción: octubre de 1996
Copyright 1996

Rural Finance Program
Department of Agricultural Economics
The Ohio State University
2120Fyffe Road
Columbus, Ohio 43210-1099
schreiner.10@osu.edu

Abstract

This paper focuses on the difficulties inherent in the prudent management of growth of
microfinance organizations and on potential limits to the increased efficiency, profitability, and
sustainability expected from growth and large size. The paper addresses both positive and
negative implications of rapid growth for microfinanceorganizations. The experience of
BancoSol in Bolivia is used to illustrate these questions. Building upon the successful experience
of PRODEM, BancoSol was chartered as a private commercial bank in 1992. The paper
discusses the intangible assets inherited from PRODEM that gave BancoSol a head start and the
additional advantages that resulted from formalization as a bank, in particular from theauthorization to mobilize deposits. BancoSol shows outstanding success in terms of breadth,
depth, and quality of outreach and in terms of sustainability. It is the microfinance organization
with the largest number of clients in Latin America and it reaches poor clients who could never
expect to gain access to conventional financial institutions. The paper discusses the incentive
structure associatedwith a lending technology that has resulted in low loan arrears and the costeffective supply of small loans. Success is explained by a strong concern with financial viability,
development of a lending technology appropriate for the market niche, a long learning period, and
upgrading into a formal intermediary. As it grew, BancoSol had to face a reduction of revenues
as a proportion of productiveassets and an increase in the average cost of funds, which combined
reduced its operating margin by 13 percentage points. This challenge was fully met by reducing
operating expenses as a proportion of productive assets. While growth of PRODEM had been
mostly constrained by too rigid access to donor funds, growth of BancoSol has been constrained
by threats on asset quality and by diminishingmarginal economies of size. Portfolio efficiency has
grown steadily. This growth has been the net outcome, however, of reductions in transactions
efficiency and of increases in average loan size after transformation into BancoSol. The paper
explores the sources of increases in average loan size and it concludes that mission drift has not
occurred at BancoSol, which continues to focus on small loans tomicroentrepreneurs. The
evolution in transactions efficiency is related, in turn, to sources of extensive (installed capacity)
and intensive (productivity) growth. Extensive growth has been rapid at BancoSol and it tends to
dampen productivity increases. Finally, the paper reviews the pressures from growth on the
original informal culture of the organization and the gradual establishment of moreformal
structures.

BANCOSOL
El reto del crecimiento en organizaciones de microfinanzas1
Claudio González Vega, Mark Schreiner, Richard L. Meyer,
Jorge Rodríguez Meza y Sergio Navajas2

I.

Introducción: el reto del crecimiento

Este documento examina las dificultades inherentes en el manejo prudente del crecimiento
en organizaciones de microfinanzas e identifica límites potenciales a la mayoreficiencia, rentabilidad y sustentabilidad que usualmente se esperan del crecimiento y de alcanzar mayores dimensiones.3
Para ilustrar estos dilemas el documento usa la experiencia del Banco Solidario S.A.
(BancoSol) en Bolivia. En el caso de BancoSol la formalización como banco trajo consigo la

1

Este documento fue preparado originalmente para la Reunión de Expertos sobre Mecanismos
Financieros en...