New Member Spotlight: BancoSol

Thursday 28th July 2022

BancoSol was founded in 1992 in Bolivia and has been the first regulated bank dedicated to microfinance in the world, giving access to microcredit to thousands of Bolivian families excluded from the formal financial system. It currently serves more than 1 million entrepreneurs in the micro and small business sector. We spoke with CEO Marcelo Escobar about the bank’s innovative approach to serving the informal business sector and supporting women entrepreneurs.

Alliance: Could you tell us about BancoSol’s market position in Bolivia and the overall strategic vision of the company for our global readers?

Marcelo Escobar: BancoSol was born 30 years ago as the first commercial and regulated bank in the world dedicated to microfinance, providing access to microcredit to thousands of Bolivian families excluded from the formal financial system. Since its creation, more than 5 million income generating activities by Bolivian entrepreneurs have been supported.

BancoSol has a solid position in the Bolivian financial system. It has been the leader in the country’s banking sector for the last six years due to its strong performance in terms of capital, assets, management, profitability, and liquidity, according to the Camel Ranking of financial evaluation with data from 2021. As Bolivia’s leading microfinance provider, we serve more than 1 million customers and are present across the country through more than 750 service points, including our own agencies: Sol Amigo External ATMs, Sol Amigo Express Non-Financial Correspondents and ATMs.

As for our strategic vision, we will continue to promote the economic and social development of entrepreneurs in the microenterprise sector with comprehensive financial and non-financial products and services that support the growth of our clients’ businesses. We are especially committed to promoting the economic empowerment of women, as well as the new generation of young entrepreneurs.

Alliance: BancoSol is synonymous with microfinance, having introduced pioneering methodologies that have enabled millions of microentrepreneurs access finance over the years—often through the integration of new technologies. What technologies are the next game changers for enhancing the economic security of low-income households?

ME: Indeed, BancoSol originated a microcredit technology that was a first in Bolivia and supported its adoption internationally as well. The business model we developed made lending to microenterprises and small businesses, which in the past were considered too risky by banks, into a profitable and sustainable market opportunity.

Since then, BancoSol has continued to integrate new technologies to evolve our methodologies and service delivery mechanisms for advancing full financial and digital inclusion. To do this, we follow a clear and defined strategy which focuses on innovation to continuously improve business processes by integrating new technology, often in partnership with fintechs, to enhance the growth of our customers’ businesses.

Alliance: 50 percent of your customers are women. What has BancoSol done to bring them into the bank and what are you doing for female entrepreneurs in particular? 

ME: Currently, 50 percent of the of the more than one million customers we serve are women, who we support with $860 million in loans to grow their businesses.

Serving women entrepreneurs, who are more vulnerable than men, is betting on the future. They are important catalysts for a country’s progress as they contribute to the development of their families and communities, which drives sustainable, inclusive growth and poverty reduction. For this reason, since its origins, BancoSol has promoted the economic empowerment of Bolivian women, so that they can move forward with their businesses and make decisions regarding the use of their income in a way that improves the well-being, education, and health of their families.

Alliance: What are your plans for building out your CVP for women?

ME: BancoSol is currently the number one bank in terms of women customers. 140,400 of our active borrowers are female; equivalent to 45 percent of credit customers.

Our value proposition has always been oriented towards making financial inclusion a reality for Bolivian women, as we are aware of the transformative impact it generates. However, we also know that there is still a long way to go to include women who remain outside formal financial services systems, on the one hand, and the growth of women-led businesses, on the other. So to to strengthen our value proposition, we are working hard to deepen our understanding of the needs of our clients and the barriers to accessing and using financial and non-financial products.

Alliance: Collecting sex-disaggregated data is critical to establish a baseline and monitor the program yet we know that defining and tracking women-owned/led businesses has challenges. How have you solved for those? 

ME: The bank is deepening its data strategy, and in the process, setting standard criteria to define and identify businesses led by women—as they are not always the actual borrower in name, but they are the ones who run the business or have a main decision-making role—will be determined and agreed upon.

Given the levels of informality of the businesses that we finance, there is no information on shareholding or organizational structure of the businesses we serve. Therefore, the determination of women-owned/women-led businesses will involve information gathered by the Relationship Managers. We have very solid Relationship Banking at BancoSol; that is part of our DNA.

Alliance: As for female representation among BancoSol’s employees, how does the bank’s internal diversity look? 

ME: We have a strategic objective of Diversity, Equity and Inclusion which is linked to our sustainability goals. In March of this year, we signed the UN’s Women’s Empowerment Principles (WEPs). 51 percent of our 3,151 employees are women; 47 percent of supervisory positions and 22 percent of senior management positions are held by women. Likewise, 44 percent of the board of directors is made up of women, which shows our strong commitment to equity and diversity.

We are taking concrete actions to solidify a culture of gender inclusion; for example, by rigorously reviewing equity policies in selection and promotion processes and guaranteeing salary equity according to the level of responsibility and performance. We also train staff on the underlying causes of inequity, such as unconscious bias, as well as on gender intelligent design, and implement programs that enable employees to have healthy family environments.

We are firmly convinced that when gender equity is present in an institution’s value chain, it is undoubtedly contributing to building a better country.

Alliance: How did you first hear about Financial Alliance for Women and why did you decide to join?

ME: One of BancoSol’s strategies to enhance our impact is to build strategic alliances with relevant agencies and associations/entities focused on issues of common interest. That is why we joined the Financial Alliance for Women, a leading organization known worldwide for its commitment to promoting women’s economic empowerment.
BancoSol’s membership in the Financial Alliance for Women will allow us to work together towards this common goal, sharing best practices with the rest of the members and generating synergies to open access to financial services for women around the world.