Advisory Center for Affordable Settlements & Housing

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Document Type General
Publish Date 23/10/2003
Author Updating by ACASH is in process
Published By The University of California at Berkeley
Edited By Tabassum Rahmani
Uncategorized

Credit Bureaus and the Rural Microfinance Sector in Peru

The microfinance (MF) sector has developed rapidly in developing countries over the last two decades, making credit available for many poor micro-entrepreneurs, although in most cases it has practically skipped the rural poor and most particularly their agricultural activities as smallholders. This microfinance revolution has generated a number of studies on the sustainability and impact of microcredit programs. One of the issues of growing concern in countries with a large microfinance sector is the effect of the increasing competition, among MFIs and with the commercial banks, on the sustainability of the sector. Higher competition improves the access to credit for small microentrepreneurs, but may also allow them to incur over-indebtedness if credit histories remain private between the MFIs and their borrowers. In Peru, like in many other developing countries, the MF sector has been growing significantly over the past two decades, especially in urban areas.

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