The increasing incorporation of new actors, on the supply side, in the Peruvian microfinance market, in which they compete: Municipal Savings Banks, Rural Savings Banks, Edpymes, Finance Companies, Multiple Banks, Non-Governmental Organizations, Cooperatives, etc. It has been creating strong competition in the segment, which is reflected in:
The saturation of traditional markets (urban and marginal urban) and slow growth in the loan portfolios of the providers.
Increasingly risky markets due to the over-indebtedness of many of its applicants, which causes lower productivity of Credit Analysts and greater recovery efforts.
Markets that are less and less profitable, a consequence of the two previous points: saturation due to greater competition and increased risk due to over-indebtedness. This situation is reflected in a higher default, which causes higher operating expenses due to the strengthening of collection activities, higher provisions, higher write-offs and, finally, a lower ROA.
Among the measures that some MFIs have been adopting, the following stand out:
The entry into new market niches not served, such as rural areas and the mountains, under the modality of Public - Private Associations, which allows them to use the infrastructure and logistics of the state bank.
The return of Microfinance Institutions - MFIs to the segment that gave rise to them (microfinance), leaving aside non-retail loans for traditional banks, with some resistance within the MFIs themselves, especially from the Analysts themselves Credit, which show a certain “gentrification”.
Implementation of over-indebtedness policies.
Strengthening of recovery and supervision units.
Tendency towards consolidation through mergers, under the criterion that there will be less and less space for the little ones.
Offer of new products for microentrepreneurs, such as microinsurance, remittances, microleasing, among others.
However, nothing is said about customer loyalty, through the creation of a culture of customer satisfaction, or about maximizing know-how through the internationalization of markets.
Why not align MFIs towards the client, redefining their processes, products and services based on the satisfaction of their users? Why not apply the success formulas of other industries? Let's not forget that customer satisfaction pays off in long-term relationships and profits for companies.
Why not strengthen human capital, if MFIs depend on it? Let's not forget that the relationship between clients and MFIs is through the Credit Analysts, who migrate the portfolios every time they change MFIs.
Why not regionalize know-how? Entities such as the BBVA Foundation already do.
The good times are behind us. Those times when it was possible to grow geometrically with profit margins markedly higher than that of the rest of the market segments are experiences of the past. Competition has saturated markets, made them riskier and less profitable, and the work of MFIs now demands new challenges that imply changing current paradigms: who will take the first step?
