Author (Your Name)

Kelly Miller, Colby College

Date of Award


Document Type

Honors Thesis (Open Access)


Colby College. Latin American Studies Program


David L. Nugent

Second Advisor

Silvana Palermo


The structure of this study is as follows: The first chapter describes the origin of microcredit and the three major lending models. This chapter also includes a description of the motivation of the study as well as the methodology used. The second chapter illustrates the changes of development strategies in Bolivia and identifies the motivation behind and significance of each development method. The third chapter discusses the informal sector, which is the targeted population of microcredit. This chapter presents several theories about the development of the informal sector and illustrates how politics shape the informal sector in Bolivia. The fourth chapter is a historical description of the foundation of four microfinance institutions: (I) Foundation for the Promotion and Development of the Microenterprise Sector (PRODEM),l (2) Banco Solidario, S.A.2 (3) Caja de Ahorro y Prestamo Los Andes (Caja Los Andes), and (4) Center for the Development of Economic Initiatives (FIE).3 This chapter describes the transformation of NGOs from non-profit microfinance endeavors to for-profit, microfinance institutions and discusses how this transformation affected the original mission of microcredit The fifth chapter presents empirical evidence regarding the financial sustainability of the aforementioned microfinance institutions. This chapter also illustrates who are the real beneficiaries of rnicrocredit. The sixth chapter refutes the data that microcredit profitabillty is an adequate indicator of microcredit success and poses a new definition. It also presents substantial evidence that microcredit practices negatively affect the poor. Finally, my study concludes with a summary of my argument and recommends the further study of microcredit.


Microfinance -- Bolivia, Economic development -- Latin America, Financial institutions -- Bolivia