April 2007
Case
HBS Case Collection

Microfinance in Bolivia: A Meeting with the President of the Republic

Format:Print
| Pages:5

Abstract

Herbert Muller, chair of leading microfinance bank BancoSol, has met with Evo Morales one year after the populist leader's inauguration as president of Bolivia and proceeds to write an email to his fellow board directors. The bank is world famous for pioneering microfinance while delivering superior financial performance. Evo Morales is an Amerindian who supporters see as a response to the white oligarchy that has long dominated Bolivia and as a champion of the downtrodden, in the poorest country in South America. In the first year of his administration, he has nationalized the oil and gas industry, created a constituent assembly to rewrite the constitution, and launched agrarian reform. The meeting between Muller and Morales takes place at the Bolivian banking association where the government officials, while committing not to mandate the reduction of interest rates in microcredit, express their expectation that rates will drop as quickly as possible. A week earlier, senior cabinet officials had met with the president of the banking association and expressed their wish that interest rates for loans in the banking system would decline to single digits.