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Partnership to expand Sources of Funds for Rural Microfinance in Peru: The Case of Confianza

Topic :

This study explores the way a regulated microfinance institution in Peru, Confianza, links to external partners to expand its sources of funds. The author discusses the impact of recent microfinance regulation has had on the opportunities for Confianza to diversify its sources of funds. The author states that in the Peruvian context regulation plays a significant role in the type and nature of financial linkages informal financial actors can engage in.

In short, regulated MFIs like Confianza have greater access to funds from commercial banks and the government backed apex organization, COFIDE, which appear to be more secure and less vulnerable to the changes of donor priorities. For purposes of comparison the author discusses briefly the challenges faced by ARAWIRA, an unregulated financial NGO, in obtaining funds on a sustained basis.

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