Guatemala Needs Standards for Microfinance
A law regulating the microfinance market would open the opportunity to capture savings that currently can only be done through cooperatives and banks.
Wednesday, January 26, 2011
The article by Byron Dardón in Capital.com.pa, reports that the bill on microfinance is expected this year and has the support of the Financial Inclusion Program of the Treasury of the United States, which promotes the adoption in Latin American countries of market governing rules.
A warning has been given that 44% of microfinance clients are overindebted and that a change is required in the regulation in order to reverse the situation.
Despite a less favorable macro-economic environment, the credit portfolio of the micro-finance sector in Central America grew 28% in 2007 in comparison to the previous year.
Nearly three years after the crisis caused by the No Pago movement, the sector is growing at an annual rate of 12%, driven by traditional credit, micro-insurance, and health services.
Between 2010 and 2011 the microfinance portfolio increased by 23%, going from $84 million to $104 million, averaging $529 per loan.
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