Corporate Governance and Access to Finance - ESBG

CASE STUDY 5:CAJAS MUNICIPALES DE AHORRO Y CRÉDITO (CMAC) IN PERUIntroductionWith 20-25 years of experience, CMAC are now consolidated institutionsin the Peruvian financial landscape. They withstood very serious shocks andchallenges: the hyperinflation in the late 80s and early 90s, the privatisationsin the 90s, the Asian crisis and its aftermath in the Latin American regionand, more recently, the 2009 crisis (which in the case of Peru has beenrelatively mild). They have grown to become significant players in criticalsegments of the Peruvian economy, offering an increased variety offinancial products, becoming a reference in the microfinance industryboth nationally and internationally and spanning across the country,especially in remote areas.CMAC are savings banks, modelled on the German savings bank system,created in the early 80s to correct the market failure of restricted accessto banking services for large segments of the population, mainly inthe provinces.The General Law of the Financial System defines CMAC as entitiesthat offer deposits to the public and whose specialty consists on lendingto micro and small enterprises. Although their market share in Peru’sbanking system (measured as the percentage of total loans) is small,just 6 percent, CMAC have remarkably contributed to the excellent healthof the microfinance business environment in the country, as a result ofwhich Peru has been awarded the top position in the 2009 MicroscopeIndex. This index, launched by the Inter-American Development Bank,Corporación Andina de Fomento, International Finance Corporation andthe Economist Intelligence Unit, covers 55 countries.CMAC have gradually expanded the scope of its financial services fromcredit pledged with gold or silver jewels as guarantees to consumercredits and microfinance. In the last decade their services have expandedto include a range of new activities, from agricultural credit (since 1999)to housing finance (since 2002). A recent modification to the GeneralLaw of the Financial Insurances and Administrator of Pensions FundsSystem in 2008 authorizes new operations to the CMAC, such as leasing,factoring and discount of bills of exchange.144