A Case Study Of Banco Compartamos

Banco Compartamos

Introduction

Decision-making is one of the most important aspects of human life. Primarily, there are many factors that determine our daily decisions, and failure to consider such decisions may set an individual or an organization on the wrong path. This is arguably true for any entity regardless of its size, geographical location or field of operation. It therefore follows that awareness of the internal and external environment, and a more service oriented rather than profit oriented approach is a critical determinant in the success of a business. Sometimes it may take experience in an area to learn what exactly is fit for the business. In this case, a lot of patience and persistence may be necessary if any considerable advancement is to be realized. It is not always the desire for profits and class that oblige individuals into business. Banco Compartamos is a micro finance commercial institution that has an interesting history, having slowly grown from scratch to be one of the most popular micro finance institutions in Latin America. The primary objective that the founders had in mind was to help the poor, rather than doing business.

Opportunities are always available around us; what really matters is our capability to see such opportunities, the desire to turn them into business ideas and the courage to implement these ideas to the latter.

Banco Compartamos is a commercial microfinance institution rather than a village bank. Up to date, the expansion of the institution has seen it branch out numerously from the pilot objective, which is giving loans to the poor. Analyzing the services delivered by the Grameen Bank in Bangladesh, there is a kind of direct focus on the poor. Notably, loans are not advanced ...

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...e effect on the poor, as they give up what they possess for the pockets of the rich. I believe this is the same situation that Banco Compartamos found itself in after the public offering. It is inevitable, and less option is available since the capital markets have almost closed the doors on non-profit institutions. This is to say that village micro finance has no space in the current business environment. The situation continues to worsen, and the future will see the micro finance industry transformed to become completely commercial to access expansion funds from the rich. Investors will only be looking for such institutions to invest their wealth, ignited by the desire for profits. This is bad news for the poor of course, but choices are really limited. Village micro finance can only survive where it can be fully sponsored by the government and other institutions.