The evolution of microfinance in Bolivia: a commercialized industry

As the microfinance industry has grown into a worldwide development, many different strategies and lending technologies have surfaced. With a focus on sustainable and profitable operations, the commercialization trend has taken over much of Latin America. This paper examines the impacts of, and the motivations and methods behind the commercialization process by exploring the highly commercialized microfinance industry in Bolivia. The Bolivian case study demonstrates how the commercialization of the microfinance industry in that country has expanded outreach, increased efficiency and created a competitive industry that integrates the informal population into the formal banking system. With strong institutions and a solid regulatory framework, financial sector development is the primary benefit of a commercialized industry. Although poverty alleviation is not the principal objective of the Bolivian microfinance sector, the numerous positive aspects of the country‟s model should be given merit.