the mif blog

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The impressive impact of village banking in Paraguay

By Lorena Rios

The lower-middle-income country of Paraguay happens to be one of the most profitable markets in the world for banks, according to a study by McKinsey & Company. But 71% of Paraguayans have no bank account, and 42% do not use formal financial products. Of the country’s 16 banks and 12 financial institutions that are regulated by the Superintendent of Banks, only one—plus one nonprofit organization—are directly working on rural microfinance programs for poor areas of the country.  And they are producing some impressive results with a microcredit approach called village banking.