Cablegate: Loans to Microfinance Institutions

VZCZCXRO2218
PP RUEHLMC
DE RUEHLP #3253 3481606
ZNR UUUUU ZZH
P 141606Z DEC 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 5959
INFO RUEHBO/AMEMBASSY BOGOTA 4789
RUEHBR/AMEMBASSY BRASILIA 8702
RUEHGE/AMEMBASSY GEORGETOWN 0524
RUEHME/AMEMBASSY MEXICO 2159
RUEHMU/AMEMBASSY MANAGUA 0500
RUEHJA/AMEMBASSY JAKARTA 0023
RUEHIL/AMEMBASSY ISLAMABAD 0242
RUEHML/AMEMBASSY MANILA 0156
RUEHLMC/MILLENNIUM CHALLENGE CORP

UNCLAS LA PAZ 003253

SIPDIS

SIPDIS

PASS TO LOREN RODWIN, SENIOR INVESTMENT OFFICER, SMALL AND
MEDIUM ENTERPRISE AT OPIC

E.O. 12958: N/A
TAGS: EINV ECON BL BR CO IN ID MX NU PK RP
SUBJECT: LOANS TO MICROFINANCE INSTITUTIONS

REF: SECSTATE 165106

1. (U) The following is in response to a potential
Overseas Private Investment Corporation (OPIC) program to
support loans to Microfinancing Institutions (MFI) and, in
particular, the Bolivian MFI, Fundacion Boliviana para el
Desarrollo de la Mujer (FUNBODEM). FUNDOBEM is part of the
Women's World Banking (WWB) network and OPIC's proposal to
help support the NGO has the Mission's approval.

2. (U) As of December 2006, FUNDOBEM had reached almost
5,000 borrowers, mostly women in the city of Santa Cruz and
the surrounding area. The institution's financial profile
looks strong; however, since it is a non-regulated
microfinance NGO, external funding is always needed because
they cannot raise deposits directly from the public. The
current GOB initiative to regulate credit unions will not
affect FUNBODEM, so although there are vague GOB plans to
strengthen regulation of NGOs, FUNBODEM will probably not be
affected in the near future. In sum, external financing will
continue to be needed in the medium term to extend outreach.

3. (U) USAID/Bolivia has not worked directly with FUNBODEM
recently, but is in frequent contact with the microfinance
NGO association FINRURAL and there appears to be no reason to
object to this proposal. FUNDOBEM has no know ties to
terrorism, money laundering, corruption, or legal violations.
Post appreciates OPIC's initiative in support of Bolivia's
microfinance sector.

Minimize considered.

GOLDBERG

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