Peru and Bolivia have the best environments for microfinance in global ranking

Peru ranks first followed by Bolivia, Pakistan and Kenya, according to the 2011 ranking, which compares the microfinance sector in countries and regions across two broad categories—Regulatory Framework and Practices and the Supporting Institutional Framework. These are complemented by an adjustment factor for political shocks and stability.

The strong results for Latin America have been driven by high scores on elements that enable the microfinance business, particularly the existence of credit bureau infrastructures that are relatively well established in the region.

Other Latin American countries that made into the top dozen include: El Salvador, Colombia, Ecuador, Mexico, Panama and Paraguay. Mexico and Brazil, Latin America’s biggest economies, made important strides in improving the environment for microfinance businesses with both countries now ranked among the top 15 performers.

The report notes that, as a group, Latin American countries perform less well on the Regulatory Framework and Practices, although top performers—Bolivia and Peru—joined by El Salvador, Ecuador and Panama, hold their own in the overall rankings, placing them in the top 10 worldwide.