Microfmance: Sustainability and Poverty in Bolivia
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This paper is an attempt to discern the relationship between sustainability and outreach in Bolivian microfinance. The paper provides an introduction to microfinance in Bolivia and the economy in which it flourished. A brief economic history of Bolivia is provided starting from the beginning of the 20th century. Following this background is a discussion of the current state of the Bolivian economy. The paper then details the current state of the Bolivian economy. In the current Bolivian economy, microfinance has flourished and description of both the origins of microfinance and the recent financial crisis in the microfinance sector are given. Common structures of micro finance organizations and the regulatory environment in Bolivia are also examined. Histories of BancoSol and Caja Los Andes are provided since BancoSol and Caja Los Andes are the subjects of this analysis. In pursuing an analysis of outreach and sustainability for microfmance in Bolivia a proper framework is established. This framework relies on the breadth, length, and depth of Banco Sol and Caja Los Andes. The relationships among breadth, and depth are analyzed using regression techniques. The results of the analysis are that there is a relationship between outreach and sustainability. The relationship between outreach and sustainability has important ramifications for microfmance in Bolivia, although there remain significant problems in attempting to evaluate microfinance institutions.