Banco Do Nordeste

This case study examines CrediAmigo, the microfinance program of the Banco do Nordeste (BN). It demonstrates that a microfinance program within a state-owned retail bank has the potential for rapid growth and outreach, if there is coordination between the bank management and supporting donors.

CrediAmigo, is one of the largest programs in Latin America in terms of outreach, and is a leader of microfinance service provision in Brazil. Yet, the program's outreach is limited, given the potential market. Growth has placed a stress on the programs personnel and systems. Further, government initiatives to control interest rates threaten the sustainability culture of CrediAmigo.

The case study indicates that there is unmet demand for market-led microfinance in the poorest region of the country. Insights from the CrediAmigo program include:

• Provision of sustainable microfinance services to remote areas is possible;
• Training of personnel from donor and the financial institution is essential for project progress and success;
• Support from the World Bank, commitment of BN's senior executives and use of outside technical expertise is important to program success;
• Expanding the program and delivering good financial performance is a challenge for BN.