II CAF Microfinance Forum

(Lima, March 5, 2007).- The II CAF Microfinance Forum "Restructuring and opportunities in the microfinance industry" successfully achieved its objective of debating the current state of microfinance and its main challenges. The event was attended by over 60 executives and professionals from the world of microfinance in the region.

Aware that micro-, small-, and medium-sized enterprises in the region are a fundamental pillar for achieving the sustainable development of its shareholder countries, CAF organized this event which contributes to strengthening the financial system that serves financial microenterprises.

The presence of important experts on microfinance in the Forum gave a broad and complete view of the strengths and threats, challenges and opportunities of this industry in Latin America, as well as sharing experiences of successful cases in the area of financing for the rural sector, expansion of credit to new sectors, innovation, new technologies, possibilities of strategic alliances, and effective alternatives for obtaining funds available to microfinance institutions.

One of the main conclusions of the discussion panels was the need to rethink the future of microfinance in relation to support for reinvestment and permanent innovation of institutions dedicated to this activity along with their products.

Speakers emphasized the existence of limits in various Latin American countries on expanding coverage of microfinance institutions to vast sectors of the population, especially the rural sector in situation of poverty. One of the major challenges that these institutions will have to face is competition from other institutions, such as the banks and retail institutions, which have turned their attention to this area of finance.

One of the most important reflections of the discussion workshops on the role of microfinance in Latin America was that the institutions involved in this task can and must become a support for generating social and citizen inclusion.

Another of the challenges pending, according to the II CAF Microfinance Forum, is to achieve an adequate balance between the need for sufficient levels of financial profitability and healthy loan portfolios (as required by the supervisory authorities, the sources of financing and the risk rating agencies) and adequate social profitability, understood as a lever for generating development and improving the living conditions of the less favored populations of the region.

Distinguished experts from the microfinance sector participated in the II CAF Microfinance Forum "Restructuring and opportunities in the microfinance industry,” including Luis Noel Alfaro of INCAE, Reynaldo Marconi of FOROLACR, Robert Christen of the Boulder Institute, Maria del Carmen Díaz Amador of the Mexican Secretariat of the Economy, among other personalities.