To expand access to financial services to low-income Bolivian microenterprises and small businesses, the MIF will support the creation of a new, regulated microfinance institution in Bolivia. CIDRE Entidad Microfinanciera Regulada (EMR) will be devoted to servicing especially the rural and productive sectors. The MIF plans to invest up to US$1.75 million, and provide non-reimbursable technical cooperation of up to US$170,000. Other investors will contribute an additional US$8.5 million in capital.
Small rural producers, microenterprises, and other small productive businesses require a variety of financial services—credit, savings, and payment for services—to be able to manage their business activities and to handle fluctuations in their financial position.
In Bolivia, despite the maturity of the microfinance industry, in 2011 70% of the regulated financial institutions' portfolio was concentrated in only twelve of Bolivia’s 327 municipalities. In addition, very few financial institutions provide financial services in rural areas and in the agriculture and small industry sectors. As a result, most of Bolivia’s rural population and a good part of the peri-urban areas and productive sectors continue to lack financial products tailored to their needs.
The majority shareholder, CIDRE Institución Financiera de Desarrollo, of the new microfinance institution has over 20 years’ worth of experience driving rural and urban development. The new institution CIDRE EMR will be able to expand the supply of financial services and continue to prioritize productive sectors and rural areas.
Through the project both the socioeconomic conditions and the productive performance of more than 17,000 low-income clients and small businesses are expected to improve. CIDRE EMR will target a total portfolio of US$100 million by the end of 2017, with 70% located in rural areas. Deposits are envisioned to rise to US$50 million (40% in rural areas), serving more than 17,000 borrowers and 27,000 savers.