The Transformation of Accion Communitaria del Peru (ACP) to Mibanco

This paper presents the case of Accion Communitaria del Peru (ACP) in two sections. The first section focuses on the evolution of ACP from a NGO working on several aspects of community development, to a commercial bank (Mibanco) having a strategic focus on micro enterprise development. The highlights of this transformation are:

• Rapid growth of ACP's microcredit program from 1990-1998;
• Growth planning and evaluation of different options such as Financiera and Entidades de Desarrollo para la Pequeña y Microempresa (EDPYMEs);
• Formation of Mibanco  first full service microfinance in Peru in 1998;
• Structural, financial and operational transformation.

The second section explores the impact of this transformation on ACP's clients. The important findings are:

• Shift in poverty levels of the clientele the new entrants were poorer;
• Increased transaction costs for clients as a result of more paperwork;
• Strained client relationships due to a more rigorous follow-up;
• Loan terms better suited to the poor, despite higher transaction costs;
• Increased choices for the clients.

The paper concludes with the observation that commercialization does not necessarily lead to mission drift.