LOANS TO MICROFINANCE INSTITUTIONS

UNCLAS LA PAZ 003253 SIPDIS SIPDIS PASS TO LOREN RODWIN, SENIOR INVESTMENT OFFICER, SMALL AND MEDIUM ENTERPRISE AT OPIC E.O. 12958: N/A TAGS: EINV ECON BL BR CO IN ID MX NU PK RP SUBJECT: LOANS TO MICROFINANCE INSTITUTIONS REF: SECSTATE 165106 ¶1. (U) The following is in response to a potential Overseas Private Investment Corporation (OPIC) program to support loans to Microfinancing Institutions (MFI) and, in particular, the Bolivian MFI, Fundacion Boliviana para el Desarrollo de la Mujer (FUNBODEM). FUNDOBEM is part of the Women's World Banking (WWB) network and OPIC's proposal to help support the NGO has the Mission's approval. ¶2. (U) As of December 2006, FUNDOBEM had reached almost 5,000 borrowers, mostly women in the city of Santa Cruz and the surrounding area. The institution's financial profile looks strong; however, since it is a non-regulated microfinance NGO, external funding is always needed because they cannot raise deposits directly from the public. The current GOB initiative to regulate credit unions will not affect FUNBODEM, so although there are vague GOB plans to strengthen regulation of NGOs, FUNBODEM will probably not be affected in the near future. In sum, external financing will continue to be needed in the medium term to extend outreach. ¶3. (U) USAID/Bolivia has not worked directly with FUNBODEM recently, but is in frequent contact with the microfinance NGO association FINRURAL and there appears to be no reason to object to this proposal. FUNDOBEM has no know ties to terrorism, money laundering, corruption, or legal violations. Post appreciates OPIC's initiative in support of Bolivia's microfinance sector. Minimize considered. GOLDBERG