Looking through the glass, darkly

The Peruvian microcredit sector's modern roots date from early adoption in the 1970s to experimentation in the 1980s, institutionalization in the 1990s and early 2000s, rapid growth prior to the global financial crisis in 2008, and consolidation until the mid-2010s. But looking through the glass, darkly, as the Apostle Paul states in the Book of Corinthians, it is possible that we might not yet be able to see that the Peruvian microcredit sector's perceived strength may also turn out to be its greatest vulnerability. The commercial focus of microcredit may have contributed to the persistence of weaknesses in the development finance system, mainly in rural areas and among small businesses. The toll on Peru's still nascent microcredit industry was significant. Credit volumes for microenterprises – the main source of livelihood for the country's poor, which itself was well over half the population – shrank from US$80 million to US$48 million, while the number of clients fell from 60,000 to 9,000.