Apex Organisations and the Growth of Microfinance in Bolivia

Publication Date: Sep 1998
Published by: OSU Rural Finance Program
Document Type: Case Study

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What are the arguments against apex organisations in microfinance?

Bolivia has the most advanced microfinance sector in Latin America which has been a model worldwide. However, apex organisations-second-tier wholesaling mechanisms that lend and offer non-financial assistance to retailing microfinance organisations-have not been responsible for this success. Former and current Bolivian apex organisations have engaged in little market development. Some have provided liquidity to microfinance organisations, but they have not played an indispensable role in the development of the sector. Other mechanisms for the delivery of donor aid have been more effective in strengthening the best Bolivian microfinance organisations. There appears, therefore, to be no justification for various apex organisations planned for the future. These mechanisms may actually discourage deposit mobilisation and if they disburse funds to unsustainable microfinance organisations, they may create an unfair playing field

Examines the role of apex organisations in the development of microfinance in Bolivia in two sections:

• discusses demand and supply in the market for microfinance, the regulatory framework for the sector, and the nature of constraints on sustainable microfinance in this country
• evaluates the poor performance of a number of public-sector apex mechanisms and the predicament of one non-government apex organisation. Further discusses options for the future