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Management internationalInternational ManagementGestiòn Internacional

Challenges for Inclusive Finance Expansion: the Case ofCrediAmigo, a Brazilian MFIFréderic Lavoie, Marlei Pozzebon and Lauro Gonzalez

Volume 15, Number 3, Spring 2011

URI: https://id.erudit.org/iderudit/1005433arDOI: https://doi.org/10.7202/1005433ar

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Publisher(s)HEC MontréalUniversité Paris Dauphine

ISSN1206-1697 (print)1918-9222 (digital)

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Cite this articleLavoie, F., Pozzebon, M. & Gonzalez, L. (2011). Challenges for Inclusive FinanceExpansion: the Case of CrediAmigo, a Brazilian MFI. Management international/ International Management / Gestiòn Internacional, 15(3), 57–69.https://doi.org/10.7202/1005433ar

Article abstractInvestigating the replication of microcredit methodologies in Brazil, this paperseeks to explore the conditions under which microfinance and microcredit,two “financial inclusion” strategies, are likely to enhance social inclusion. Aqualitative case study was conducted focusing the path of CrediAmigo, aBrazilian microfinance institution (MFI). This study is probably the first toprovide an integrated perspective on critical issues concerning the replicationof microcredit methodologies in Brazil. The findings may support MFImanagers and policy makers in taking steps to facilitate the expansion ofmicrofinance across Brazil.

Social inclusion might be achieved in different ways. Microfinance and microcredit are “inclusive finance” strategies that represent two of these ways. In this paper, we attempt to shed some light on conditions helping to increase social inclusion by investigating the replication of microcredit methodologies in a particular context: Brazil. A qualitative in-depth case study, focusing the path of a Brazilian microfinance institution (MFI) called CrediAmigo, was conducted over 6 months. This study is probably the first to provide an integrated perspective on critical issues related to replication of microcredit meth-odologies in a Brazilian context, and the findings reported here are likely to support managers of MFIs, as well as Brazilian policy makers, in taking steps to increase the chances of success in the expansion of microcredit oper-ations across Brazil. The transferability of the results of this study to contexts other than Brazil is open to future investigation.

Overthelasttwodecades,microfinancehasbeenreceiv-ingincreasingglobalacceptanceasasocialinclusion

mechanismandapoverty-alleviatingdevelopmentstrategy(Easterly, 2006). What started as small-scale, isolated,

microlendingexperimentsrapidlybecameafastgrowing,globalized practice. Among several definitions of micro-credit foundintheliterature,weadoptedthatwhichrefersto “programs that extend small loans to poor people forself-employment projects that generate income” (WollerandWoodworth,2001).Asmicrofinanceinstitutions(MFIs)begantoprovideagreatervarietyoffinancialservices(e.g.,micro-insurance, micro-savings), the term microfinancewas coined. In thedefinition used throughout this paper,microfinance is related to the access and use of finan-cial services by a low-income population, mainly thosetypically excluded from the traditional financial system.Therefore,microcreditisonecomponentofmicrofinance,probablythemostprominentbutnotnecessarilythemostimportant(DichterandHarper,2007).

Ingeneral,MFIsprovideloansthroughtwobasicmeth-odologies: individual and group lending. The individuallendingapproachconsistsofprovidingloanstoindividuals,usually requiring some sort of collateral (and sometimesaco-signer)asaguarantyfortheloan.Thegrouplendingapproachuses“socialcollateral”,i.e.,itallowsthepoorto

Résumé

Explorantlaréplicationdeméthodologiesde microcrédit au Brésil, cet article exa-minelesconditionsdanslesquelleslamicro-finance et le microcrédit, deux stratégiesd’«inclusionfinancière»,peuventaccroîtrel’inclusionsociale.Uneétudedecasqua-litative portant sur le cheminement deCrediAmigo,uneinstitutionbrésiliennedemicrofinance (IMF), a été réalisée. Cetteétudeestprobablementlapremièreàpré-senter une perspective intégrée sur desquestionscrucialestouchantàlaréplicationdeméthodologiesdemicrocréditauBrésil.Lesrésultatspourrontaiderdesgestionnai-resd’IMFetdeslégislateursàadopterdesmesuresfacilitantl’expansiondelamicro-financeauBrésil.

Mots clés: Inclusion financière, inclusionsociale,méthodologiedemicrocrédit,micro-finance,institutiondemicrofinance(IMF),cadremulti-niveaux.

AbstRAct

Investigating the replication of micro-creditmethodologies inBrazil, thispaperseeks to explore the conditions underwhich microfinance and microcredit, two“financial inclusion” strategies, are likelyto enhance social inclusion.Aqualitativecase study was conducted focusing thepath of CrediAmigo, a Brazilian micro-finance institution (MFI). This study isprobablythefirsttoprovideanintegratedperspective on critical issues concerningthe replication of microcredit methodolo-gies in Brazil. The findings may supportMFImanagersandpolicymakersintakingsteps tofacilitate theexpansionofmicro-financeacrossBrazil.

Keywords: Financial inclusion, socialinclusion,microcreditmethodology,micro-finance, microfinance institution, multi-levelframework.

Resumen

Investigando la replicación de metodolo-gíasdemicrocréditoenelBrasil,estearti-culoexaminalascondicionesenlascualeslas microfinanzas y el microcrédito, dosestrategias de “inclusión financiera”, per-miten aumentar la inclusión social. Pormedio de un estudio de caso cualitativoexploramos la evolución de CrediAmigo,una instituciónbrasileñademicrofinanzas(IMF). Éste es, probablemente, el primerestudioquepresentaunaperspectiva inte-gralsobrecuestionescrucialesrelativasalareplicación de metodologías de microcré-dito en el Brasil. Los resultados podránayudaragestoresdeIMFyalegisladoresaadoptarmedidasfacilitandolaexpansióndelasmicrofinanzasenelBrasil.

Palabrasclave:Inclusiónfinanciera,inclu-sión social, metodología de microcrédito,microfinanzas,institucióndemicrofinanzas(IMF),cuadroteóricomultinivel

Challenges for Inclusive Finance Expansion: the Case of CrediAmigo, a Brazilian MFI

FRÉDERIC LAVOIE MARLEI POZZEBON1 LAURO GONZALEZHEC Montréal HEC Montréal FGV-EAESP

1. Special thanks for SSHRC (The Social Sciences and HumanitiesResearchCouncil)andIDRC(TheInternationalDevelopmentResearchCentreforfinancialsupport.

58 Management international / International Management / Gestión Internacional, 15 (3)

obtainloanswithoutcollateral,theirpeersservingasguar-antors (Mitra, 2007). The members are selected by theirpeers,whoalsoevaluate their trustworthiness (KhanandRahaman, 2007). Regularly scheduled meetings allowmemberstocollectrepaymentsandsavings.Acommonpointbetweengroup lending and individual lending is the factthat theyboth relyon theclient’s socialnetwork toverifyhis/her trustworthiness before disbursing a loan (Jayo etal., 2009). The group-based lending approach comprisesa number of specific methodologies, including two thatare particularly relevant to this study: solidarity groupsand village banks. The main differences between thesetwoapproachesaregroupsize (solidaritygroupsnumber3-10 people while village banks usually number 20-50),the market segment (unlike solidarity groups, communalbanks target the poorest clients) and loan size (targetingpoorerclients,villagebankslendsmalleramounts).

Following the success of microcredit organizationssuch as the Grameen Bank in Bangladesh, Bank RakyatinIndonesia,andBancoSolidarioinBolivia(WollerandWoodworth, 2001; Dorado-Banacloche, 2001), wealthynations and international agencies have provided billionsofdollarstosupportmicrofinanceprojects.Theyeventuallystarted tofinanceprojectsof replicationof these successfulmodels and their respective methodologies and tools inorder to expand microcredit “best practices” around theworld.However,these“replicating”initiativesdidnotalwaysprovidegoodresults.Infact,scholarsandpractitionersreal-ized that the host countries often needed to significantlyadapt the original methodology for it to be implementedsustainably in their owncontext (Hulme,1990). Inothercases, the replication and implementation of the foreignmodel simply could not be achieved (Seibel and Torres,1999).

Anumberofscholarsundertooktoinvestigatetheques-tion of microcredit methodology replication, suggestingthat the emergence of new MFIs – and consequently thedevelopmentofthemicrofinancesector–mightdependontheseinstitutions’capacitytoappropriatesuccessfulmodelsfor their own context (Nichter et al., 2002). The generalquestion guiding this empirical study is: What are the conditions facilitating replication of microcredit method-ologies?Inordertoexplorethismoregeneralquestion,wedecidedtoinvestigatetheconditionsfacilitatingtherepli-cationofoneofthemostsuccessfulBrazilianexperiences,the CrediAmigo methodology. CrediAmigo is a micro-creditprogramimplementedsuccessfullyintheNortheastofBrazilandthentransferredtoRiodeJaneiro.Webelievethat by investigating this particular case of microcreditreplicationwecanshedlightonconditionsthatcouldalsobevaluableinothercontexts.

Microfinance in Latin America and Brazil

ThereexistfourtypesofMFIsinLatinAmerica:NGOs,for-profitMFIs,commercialbanksandfinancecompanies.Inthe1980s,NGOsstartedtooffersubsidizedmicrocredit.Intheearly1990s,anumberofNGOsbecamefor-profitMFIsand others became commercial banks. From the end the1990s, new banks began to enter the market, increasingcompetitioninthesector(MarulandaandOtero,2005).Inaddition,financecompanies,whichlendcreditforconsump-tion,havealsobecomestrongmarketcompetitors(ChristenandCook,2001).

ThecurrentsituationofmicrofinanceinLatinAmericaisnothomogeneous.AccordingtoTheEconomist(2009),thatevaluatedmicrofinanceasacommerciallyviableandsustainableactivityusingthirteendistinctindicators,Peruand Bolivia (along with the Philippines) are at the top,leavingbehindmorethanfiftyfivecountries.OtherLatinAmerican countries among the well ranked areEcuador,Nicaragua, Colombia and El Salvador. Larger countries,likeBrazil,MexicoandArgentina,arenotwellrankedinthemicrofinancemarket.However,itisimportanttopointoutthattheserankingsareanattempttoevaluatecountrieswithdatabasesthatcanbeoftenconsideredpoorandincomplete.

ForacompleteviewoftheevolutionofBrazilianmicro-financemarketsince the1970’s,seeMonzoni(2006).Asmicrofinancegainedpopularityworldwideduringthe80’sand90’s,Banco do Nordeste do Brasil(BND),aregionaldevelopment bank, came to perceive that microfinancewas a significant opportunity for economic developmentoftheNortheastofthecountry,oneofthepoorestregionsin Brazil (Souza, 2008). Hence, BND approached theWorld Bank in 1996 seeking support for implementationofamicrocreditprogram.Atthetime,theWorldBankwaspushingfordevelopmentofmicrocreditinitiativesinvariouscountries(Brusky,2003).

BND needed to gain knowledge of best practices inmicrocredit,somanagersweresenttovisitfivedifferentMFIsin Brazil, Bolivia, Chile, Peru and Indonesia. Followingthese visits, BND sent managers to Banco Solidario(Bolivia),asuccess-storyinLatin-Americanmicrofinancethat was originally inspired by the renowned GrameenBank2. InNovember1997, theCrediAmigoprogramwascreated.BNDsetupfivepilotagenciesincapitalcitiesandsmallertowns,proposingastandardizedfinancialproduct,called CrediAmigo Solidario, involving groups of five tosevenmembers,three-monthloansandsixfortnightlypay-ments.OneofthesepilotprojectswaslocatedinFortaleza(capitalofCeará,astateinNortheasternBrazil).Thepro-gram’srapidexpansionin1998-99resultedinpaymentdefaultproblems,whichimpactedtheportfolioquality.Inresponse,BND decided to develop a solid microcredit monitoringprocess,managedbyawelltrainedteam(Brusky,2003).

2. GrameenBankwascreatedbytheNobelPrizewinnerMuhammadYunusin1997andnowadayscountsmorethan7millionmembersandmaintainsanimpressiverepaymentrateof98%(Yunus,1999).

Challenges for Inclusive Finance Expansion: the Case of CrediAmigo, a Brazilian MFI 59

From 2004 to 2010, the program grew significantlyin terms of number of clients and active portfolio (totalamountlent).CrediAmigocurrentlyhasmorethan170unitsdistributed essentially within the Northeast and reachingmore than 650,000 clients. Since the beginning of 2009,CrediAmigohasexpandeditsoperationstoRiodeJaneiro,locatedintheSoutheastofBrazil,aquitedifferentregionin terms of socio-economic conditions and developmentlevel.This explainswhywe focusedour investigationonthe process of transferring CrediAmigo from the North-east, particularly in the state of Ceará, to the Southeast,particularlythestateofRiodeJaneiro,aricherandmoredevelopedBrazilianregion.

Microcredit methodologies’ replication

Since themid1980s,numerousreplicationsofsuccessfulmicrocreditmodelshavebeencarriedouttowidentheout-reachofmicrocreditworldwide.Still,therearefewstudieson this issue. Our review of literature discussing micro-creditmethodologiesreplicationwasorganizedaccordingtothreebasicquestions:whatisreplicated,howitisreplicatedandwhereitisreplicated.

What is replicated? Microcredit methodologiesrepli-cationimpliescertaincore principles (basicfeaturesofthemethodology)thatshouldbetransferredfromonecontexttoanother.Gibbons (1999)andSiebelandTorres (1999),analyzingtheGrameenBank,proposedthreecoreprinciples:(1)ahighleadershipcommitmentfocusingexclusivelyonthepoor–particularlypoorwomen; (2) theprovisionoffinancialservicesfacilitatingparticipationandrepayment;(3) the quickest attainment of financial self-sufficiencythrough credit discipline. However, these fundamentalfeaturescannotbesimplycopiedfromoneinstitutiontoanotherduetodifferentenvironments,andthusneedtobeadapted.

How is it replicated?Hossain(1988)andHulme(1990)have analytically categorized four possible scenarios forreplicationoftheGrameenmodel.First,themodel’sorgan-izationalframeworkisconsideredreplicableonanationalscaleinitscurrentform.Second,theoriginalmodelcanbeused as a starting point for a small-scale action researchproject,whichcaneventuallybemodifiedtosuitanewcontext.Third,anorganizationmayadoptanumberoffeaturesandpoliciespertainingtotheoriginalmodelandrejectothers.Fourth,themodelisappreciatedasaninterestingcasebutlittlecanbetransferredtoanotherinstitution.Thesescen-arios suggest that, the more the two contexts differ, themorestakeholdersneedtoadapttheoriginalmodel.

Where  is  it  replicated? The conditions required tosuccessfullyreplicateamicrocreditmethodologyareinsti-tutional (what is under the control of the institution) andsocietal(theinstitution’senvironment)innature.Examplesofinstitutionalconditionsareaccesstosufficientfundstosupporttheinstitution’sinitialexpansionandconsolidation(Seibel,1998)andawell-motivated,committedandtrainedstaff (Dick, 2002). Among societal conditions we found

economic conditions (a healthy economy opened to freemarket)(Boily,1999),politicalconditions(politicalstabilityand freedoms, and stakeholder support) (Gibbons,1999),culturalconditions(recognitionofusuryandcredit,andofwomen’srighttocredit)(Renteria,1996)andlegalcondi-tions(clearandtransparentbankinglaws).

Althoughthereplicationofmicrocreditmethodologieshas received increasing attention, much more work isneededinthearea(Dinizetal.,2009).Toourknowledge,noauthorhasstudiedthereplicationofmicrocreditmeth-odologiesintheBraziliancontext.Thisservedasaprimarymotivationforourstudy.

Conceptual framework

TheconceptualframeworkadoptedinthisstudyisbasedonarecentconstructivistframeworkproposedbyPozzebonetal.(2008),whichhasbeenconceivedtoguideempiricalinvestigationsatthecommunityorsocietallevelsofanalysisand that has been increasingly adopted by microfinanceresearchersinBrazil(e.g.,Jayo,2010;Cernev,2010;Dinizetal.2009).Webelievethatsuchaframework,whichpos-tulatesthatanysocialresearchisprocessualandinherentlymultilevel, was appropriately adapted toguideour study.The framework is based on two theoretical perspectives:thesocialshapingoftechnology(SST)andthestructurationistviewoftechnology.

Workonthesocial shaping of technology (SST)hasbeen greatly influenced by the sociology of knowledge(BergerandLuckmann,1967)andthesocialconstructionof technology (Bijker and Law, 1992). Aiming at over-comingthedeterministicconceptsoftechnologyfrequentlyfound in the management literature, the SST perspectiveallows considering the implementation of a particulartechnologyasanegotiationbetweensocialactors.Suchaviewaimsatidentifyingoccasionsinwhichdecisionsandactions related tomanagementof technology and changecaneffectivelybeapplied(ClausenandKoch,1999).ThreeSSTconceptswereselectedtointegratetheframework:(1)relevantsocialgroups,(2)interpretiveframesand(3)thetechnologyimplementationasanegotiationprocess.

Thefirstconcept–relevant social groups–referstoagroupofindividualspertainingtoacommonfunctional,geographicalorvirtualspacewhoshareanumberofvaluesandpositionsonaparticularsubjectofinterest.Subgroupsandalliancesbetweenthesegroupsmayleadtothecreationofsocialspacesandplayanimportantrole.Inthispaper,the relevant socialgroupsconsideredare those related tothe use and application of the microcredit methodologyunder investigation, includingmanagers andcoordinatorsofthemicrocreditprogram,creditagents,andclients.

Interpretive frames, thesecondconcept, arebasedonthepremisethatindividualstakingpartinarelevantsocialgrouparelikelytoshareasetofassumptions,values,positions,beliefsorobjectivesrelatedtoagivensubject.Inourwork,

60 Management international / International Management / Gestión Internacional, 15 (3)

itreferstotheapplication,replicationandadaptationofaparticularmicrocreditmethodology.Thegroup’smembersare likely to share similar perceptions and expectationswithregardtoaparticularmicrocreditmethodology.

Thethirdconcept–negotiation process –refersto theprocess of  transferring,  adapting, or simply replicating agivenmicrocreditmethodology.Differentgroupswillbringdiffering interests, stakes, and visions to that negotiationprocess,whichwillinfluencetheprocessandtheresultsof

thenegotiation(ClausenandKoch,1999).Inthisresearch,we stress the negotiation process between the relevantsocial groups involved in the replication of a particularmicrocreditmethodology.

The second theoretical perspective constituting themultilevelframeworkisthestructurationist view of tech-nology,inspiredbystructurationtheory3,whichrepresentsanimportantstreamofthoughtininformationsystemsandmanagementresearch(PozzebonandPinsonneault,2005).

FIGURE 1

The multi-level framework guiding the research

Methodology-in-practice representsthe ongoing results of suchnegotiation, with a number

of characteristics and consequences(intended and unintended)

People are guided by interpretive frames. This implies the identification of assumptions,

expectations and interests attached to the implementation and use

of a given methodology.

The transferability of a given methodology to a new context involves a negotiation (adaptation)

where different groups exert influence on how the methodology will

be implementedand used. Implies the identification

of occasions, spaces.

The connection between individuals and the local community

goes through the relevant social groups interacting in a given

social and cultural setting.

Group level Individual levelCommunity level

(could be extended to societal level)

3. Inanumberoftextsappearinginthelate1970sandearly1980s,andculminatingwith the1984publicationofThe Constitution of Society,

the British sociologist Anthony Giddens developed the structurationtheory(Giddens,1976,1984).

Challenges for Inclusive Finance Expansion: the Case of CrediAmigo, a Brazilian MFI 61

Ofthemost influential researchersemploying this theoryis Orlikowski (2000), who developed a seminal conceptthataddressestheroleofemergenceandimprovisationintechnology-relatedimplementations,calledtechnology-in-use or technology-in-practice.Weadaptedthisconcepttoformulatetheconceptofmethodology-in-practice.

The concept of methodology-in-practice will focuson the consequences of the implementation and use of aparticularmicrocreditmethodology.Inthisresearch,meth-odology-in-practicereferstotheconsequencesorresultsoftheprocessofredefiningandadaptingamicrocreditmeth-odologytoanewcontext.

Figure 1 illustrates our framework, beginning withindicationofthethreelevelsofanalysis:individual,groupand community. The group level represents the conceptofrelevant socialgroups, which bridgesthegapbetweenmicroandmacrolevels:individualsandtheircommunities,neighbourhoodsorcities.Toeachrelevantsocialgroup,wehaveattachedtheinterpretive frames,i.e.,theirassumptionsandexpectationsregardingtheimplementationanduseofagivenmicrocreditmethodology.Thenegotiation process consistsofidentifyingtheoccasionsandspacesbywhichrelevant social groups, interacting over time, replicate agivenmethodology.Theresultsofthenegotiationprocessarerepresentedby themethodology-in-practice, i.e., thewaythemethodologyhasbeenadaptedanditsconsequencesforthesocialgroupsinvolved.

Our framework is considered “multi-level” because itcombinesinextricablylinkedlevelsofanalysis(individual,group, and local community), blurring the line betweenmacro-andmicro-levelinteractions,consideringthatchan-gesat thecommunityorsocietal levelareinitiatedat theindividualorgrouplevelandvice-versa.

Methodological approach

This research aimed at understanding the conditions forlocalappropriationandtransferabilityofmicrocreditmeth-odologies. In order to explore the research question, weapplied a case study method (Stake, 1998). The selectedcase was the CrediAmigo program, hosted by Banco doNordeste (BND). CrediAmigo is considered one of themostpromisingBrazilianmicrocredit institutions todate.First, we studied the organization’s microcredit deliverymodel, which was implemented in 1997-8. Second, weinvestigatedtheconditionsandchallengesasperceivedbythesocialactorsinvolvedintheprocessoftransferringandadapting its methodology to other regions of Brazil, par-ticularlyfromCearátoRiodeJaneiro.

For thepurposeof this investigation,we reliedonaninstrumental single-casedesign (Stake,1998).AccordingtoStake,acasestudy is instrumentalwhen thecasewillbeexamined inorder toadvanceknowledgeaboutapar-ticular topic under scrutiny. The rationale supporting thechoice of BND’s CrediAmigo is that this program is the

onlymicroenterprisemicrocreditprogramtohavereachedsignificantscaleinBrazilandtohavealreadybeensuccess-fully transferred from a foreign context to the Brazilianone (CrediAmigo was inspired by the Bolivian BancoSolidario,which in turnwas inspiredby theBangladeshiGrameenBank).

Data collection:Theinformationcollectedduringtheresearch came from three complementary sources: inter-views,documentationandobservation.Duringsixmonths,thefirstauthorwasinimmersiononthesite,carryingoutreal-time observations, interviews and collecting docu-ments. We identified four main relevant social groups:programmanagers,coordinators,creditagentsandclientsofCrediAmigo.CrediAmigoisstructuredinthreelevels:regionalagencies,localagenciesandlocalunits.Thepro-grammanagerssupervisethemanagementofregionalandlocalagencies.Thecoordinatorsareresponsibleforspecificagenciesorunitsandareinchargeofallofthecreditagentsinvolved with each of the local agencies or units. Thecreditagentsareindirectcontactwithclientsandtheyareresponsibleforanumberofproceduressuchasclients’firstcontacts,creditanalysis,coaching,etc.Finally,theclientsarethoselow-incomepersonsbenefitingfrommicrocreditloans.Fifteenrespondentswereselectedaccording to theconceptofrelevantsocialgroups(Table1).Allthenamesoftheintervieweeswerechangedtoguaranteeanonymity.Thedurationoftheinterviewsvariedfrom30to1:30minutesinaverage.

TABLE 1

Presentation of the interviewees

Fictive name Relevant social group

Gilberto Programmanager

Rodrigo Programmanager

Fernando Programmanager

Hugo Programmanager

Sténio Coordinator

Leno Coordinator

Miguel Creditagent

José Creditagent

Emmanuelle Creditagent

Margarida Client

Conceiçao Client

Rosana Client

Teresa Client

Joao Client

Francinete Client

62 Management international / International Management / Gestión Internacional, 15 (3)

The criteria for selecting interviewees were basicallythree: (1) their belonging to one of the relevant socialgroups;(2)therichnessofinformationtheywerewillingtoprovide, based on a snowball process of suggestions andrecommendationsbyBNDmanagers;and (3) theiravail-ability and willingness to participate in the interviewingprocess. Our initial target was at least three respondentsfromeachrelevantsocialgroup.Theonlygroupforwhichwehavenotattainedourgoalisthecoordinators.However,wecanattestthatthetwocoordinatorsintervieweddemon-strated a solid and rich view of the conditions for thereplicationofCrediAmigo,theresultofextensiveexperienceintheinstitution.Weinterviewedfourmanagersworkingwithbusinessstrategy,i.e.,involvedwiththereplicationoftheprograminotherregions,twocoordinatorsinchargeofthemanagementofspecificagenciesorunits,threecreditagentswhoworkonthefieldwiththecommunities,andsixclientsoftheprogram.Thedataobtainedwereintegrallytranscribed.Itisimportanttonotethataresearchprotocol(inPortuguese)wasbuiltbasedontheresearchframework.Theprotocolencompassesinterviewguidelinesaswellasethical-relatedforms,likelettersofconsent.

Data  analysis: We proceeded with the analysis ofempiricalmaterialfollowingthemethodproposedbyMilesandHuberman(1994).Thisapproachtodataanalysiscom-prises three phases: data condensation, data presentationand elaboration and verification of conclusions. The fourconceptsoftheframeworkwereusedfor“analyticalinduc-tion”,i.e.,theywereusedtoguidetheinitialcategorizationwhile leavinghoweverspacefor the identificationofnewcategoriesandtherefinementofexistingonestoenrichourunderstandingofthestudiedphenomenon(Patton,2002).

Analysis and discussion of the results

Inthissection,wepresenttheresultsofourdataanalysisintermsof themainconceptsofourtheoreticalframework:interpretive frames, negotiation process and methodologies- in-practice. In order to build a plausible answer to theresearchquestion,wecompiledandcomparedtheperspectivesthatemergedfromthefourrelevantsocialgroups–managers,coordinators,creditagentsandclients–concerningthecondi-tionsfacilitatingreplicationoftheCrediAmigomethodology.

inteRpRetiVe fRAmes: the most impoRtAnt pRincipLes of the methodoLogy

Inordertocapturetherespondents’interpretiveframes,weasked the following question: what does the interviewee consider the most important principles of the methodology.Table2showsthemostsignificantprinciplesthatemergedfromtheinterviews,inorderofimportanceandbyrelevantsocialgroup.

TwoprinciplesemergedasmoreimportantamongtheessentialprinciplesofCrediAmigomethodology,whicharerelevantforabetterunderstandingoftheconditionsfacili-tating itspotential replication.Theyare: (1) commitmentofthecreditagentand(2)peerselectionandenforcement.

Commitment  of  the  credit  agent to his/her job wasthefirstaspectconsideredby9respondents.Acommittedcreditagentwouldbeonewhofeelss/hehasamissionwithintheorganization(alleviatingpoverty,assistingpeople)andwhobelievesinhis/herworktool,themicrocreditmethodology.

The most important is to have committed individuals, who understand what they are doing, who perceive something beyond the provision of credit (...) who have been provided with adequate training (...) I need to have the methodology, but I [also] need individuals who believe in that methodology, who have internalized that methodology.[Sténio,coordinator]

Peer selection and enforcementreferstomechanismsthatconsistoftransferringtheresponsibilityforanyclient’spayment default to his/her peers within the group. Here,peersrefertomembersofthelendinggroup.Peerselectionand enforcement can be considered a social filter in thatpeoplechoosethoseamongthemwhoaremosttrustworthyand thus should be allowed in the group. This implies aminimumofsolidarityandrespectbetweenpeers.

Peer selection is appreciated because it determines whether the group will be good or not. If I set a group of four individuals, it is three people telling the bank that I can be trusted. The larger the group, the higher will be the level of trust that the bank will maintain in rela-tion to that group. This is because if you have a group of ten people, it is nine of them saying they can trust the tenth.(…) I think that this is the most interesting part of the methodology.[José,creditagent]

TABLE 2

Most important principles of the methodology, by relevant social group4

Principles / Relevant social group

MG (4)

CO (2)

CR (2)

CL (4) Total

Commitmentofthecreditagent

4 2 3 9

Peerselectionandenforcement

3 1 2 2 8

Management’smonitoringprocess

2 1 3

4. The legend is as follows: “MG” for “Managers”; “CO” for“Coordinators”; “CR” for “Credit agents”; and “CL” for “Clients”.

These abbreviations will also be used in other tables throughout theanalysis.

Challenges for Inclusive Finance Expansion: the Case of CrediAmigo, a Brazilian MFI 63

Comparing these resultswith the literature,we recalltheanalysiscarriedoutbyGibbons(1999)andSiebelandTorres(1999).TheyhavesuggestedthreeessentialprinciplesoftheGrameenmethodology:(1)highcommitmentoftheleadershipfocusingexclusivelyon thepoor–particularlypoor women; (2) provision of financial services facilitatingparticipation and repayment; (3) quickest attainment offinancial self-sufficiency through credit discipline. Thecomparisonproducedthreemainconclusions.

First,theGrameen’shigh commitment of the leadership focusing exclusively on the poor doesnot appear tobeapriorityinthecaseoftheCrediAmigoprogram.Thismaybedue, at least partly, tohistorical reasons.CrediAmigowasnotsetupbyaleaderdreamingofgettinghispeople,andparticularlywomen,outofextremepovertybysettingupafinancialorganizationdevotedtoservingthepoorestofthepoor.Instead,CrediAmigowassetupbyanexperi-enced public development bank (BND) which perceivedmicrofinance as a potentially sustainable socio-economicdevelopment strategy. What emerged from CrediAmigo’sanalysiswastheimportanceofthecommitmentofthe credit agent,whichwesuggestasacontributiontoexistingliterature.

Interestingly,ourresultscorroborate thefindingspro-duced by Gibbons (1999) and Siebel and Torres (1999)regardingthesecondGrameenprinciple–the provision of financial services facilitating participation and repayment. When compared to peer selection and enforcement, weconcluded thatbothare related tocreatingconditions forachievementofthesamegoal:thelongtermsustainabilityofthelendinggroupandoftheMFI(inthiscase,CrediAmigoandGrameen)itself.

Third,wemaysupposethatthequickest attainment of financial self-sufficiencywasnotasmuchofapriorityfor CrediAmigo as it was for the Grameen Bank, sinceCrediAmigo was implemented within an experiencedsustainablefinancialinstitutionwhichalreadyhadasignifi-cantportfolioinotherareaswhenitwascreated.However,thebankdecidedthatitsfirstproduct(CrediAmigo Solidario)wouldnotfocusexclusivelyonthepoor,inordertofacilitatetheattainmentoffinancialself-sufficiency.Thisshowsthatfinancial self-sustainability was indeed a priority for thebank,eventhoughnotthemosturgentone.Inaddition,theproductthatwouldallowtheprogramtoreachevenpoorerclients(CrediAmigo Comunidade)wasimplementedaboutsevenyearsaftertheinitialimplementationoftheprogram.Thismeansthattheprogramhadtimetoreachself-sustain-abilitybeforeaggregatingproductsthatprovidelessreturn.Hence, the institution could focus energies elsewhere,namelytrainingcommittedcreditagentsanddevelopingamonitoringprocessaimedatensuringthatcreditagentsdotheirjobwellanddetectinganyproblematanearlystage.

Finally,weperformedacriticalanalysisofthedifferentviewsofcoordinators(CO),managers(MG)andcreditagents(CR). While the groups managing the MFI – managersand coordinators – provided a more global view of the

methodology andprogram, the credit agentsprovided anunderstandingthatisclosertogroundlevel,i.e.,theclients.Thiscertainlydoesnotmeanthattheperceptionofonegroupisworthless,sinceitcanbringininsightsnotconsideredbyothers. In this case, we found a rich complementarityamongthedifferentperceptions.

negotiAtion pRocess: the chALLenges foR cRediAmigo’s RepLicAtion

Inorder togainabetterunderstandingof thenegotiationprocess that takes place during the implementation anduseofCrediAmigomethodology,wequestionedmanagersandcoordinatorsonthefollowingquestion:what does the respondent expect to be the main challenges related to the replication of CrediAmigo?

Table 3 shows the main challenges for replicationaccording to different relevant social group perceptions(weretain in theTable just themost relevant factors, i.e.,thosethatemergedwithgreaterfrequencyandplausibilityfromthevoicesoftherespondents).AlthoughallchallengesdepictedinTable3shouldmeritparticularattentionintheprocess of replication of a microcredit methodology, weoutline here the first two: (1) establishment of a partner-shipwithalocalorganizationand(2)microentrepreneurs’resistancetogrouplendingmethodologies.

Establishment of a partnership with a local organ-ization: First of all, the typeofpartnership that anMFIneedstoget intodependsonthemarketwhereit is tobeimplemented. In a region where the offer of microcreditservicesislow,CrediAmigowouldnotdependonitspartner

Table 3

Challenges for replication, by relevant social group

Challenges / Relevant social groupMG (4)

CO (3) Total

Establishmentofapartnershipwithalocalorganization

3 3 6

Microentrepreneurs’resistancetogrouplendingmethodologies

3 2 5

Ahighrateofcriminality 1 3 4

Marketcompetitionandagreateraccesstocredit

3 3

Generationofpublictrustandrecognitionoftheorganization

2 1 3

Reachingclientsinscatteredanddistantareas

2 2

64 Management international / International Management / Gestión Internacional, 15 (3)

asmuchasinahighlycompetitivemarket.Intheformercase, the program could deal with a given organisation(NGO,cooperative,civilsocietyassociation)thathadnotyet initiated the provision of microcredit services. ThatorganisationcouldstartoperatingjointlywithCrediAmigo,adopting its consolidated model (structure, procedures,methods,policies).Inamorecompetitivemarket,asinlargecitiessuchasRiodeJaneiroandSaoPaulo,CrediAmigowillneedtomakemoreadaptations.Inthosecases,itmaybe particularly useful that the partner be an experiencedorganization, which already knows how to deal withinthesecontexts,helpingCrediAmigogainessentialknow-ledgeofthelocalmarketandprovideassistanceinmakingadaptations.

Theestablishmentofapartnershipamongtwomatureorganizationsisneveraneasyprocess.Experiencedorgan-izationsalreadyhavetheirownmission,vision,cultureandvalues.Thechallengeistomodify/adaptthesefeaturesinordertomakethepartnershipviable.ConsideringthesuccesstheCrediAmigomodelenjoyedintheNortheastofBrazil,itwilltrytobringthelocalorganization’smodelascloseaspossibletoitsownmodel,beitintermsofcultureandvalues, productivity or field experience. Discussing thereplicationofCrediAmigoinRiodeJaneiro,twoprogrammanagersexplainedthechallengerelatedto“imposing”theprogram’sbestpracticesonthelocalpartner’smodel.

So, our challenge is to fix this relation so it works well – each one knowing what the role of the other is, and change the culture. Because when we set up CrediAmigo, we started from zero, so we created a culture. (…) So we will need to adapt, there will be an initial shock, in this respect, that necessity of imposing a higher level of productivity, so the operation pays for itself, so there be a return. I think that this process is our main challenge. [Gilberto,programmanager]

Microentrepreneurs’  resistance  to  group  lending methodologies: the implementation of CrediAmigo inRiodeJaneirocanbeconsideredapilotproject for itsreplication in other Brazilian regions. Indeed, the imple-mentation team is confronted with at least some of thechallenges CrediAmigo initially faced in Fortaleza. Oneof these challenges is the microentrepreneurs’ resistancetogroup-lendingprinciples.Whenweconductedtheinter-views, the employees of CrediAmigo expected a certainresistanceonpartofthepopulationinRiodeJaneiro.Still,inthepresentcase,theresistancemaybegreatersincethemotivesforresistancearenumerous.

First, the people may not accept these principlesbecausetheydonotknowanythingaboutthissystemandarealreadyusedtoanothermethodology,individuallending.The predominance of individual lending in larger citiescouldactuallybeconsideredachallengeforreplicationper se.Asweobservedwhenanalyzingthetranscripts,evenclientsof CrediAmigo in the Northeast would like to receiveindividualloans.Itseemsthattheyagreetoparticipateinsolidarity groups because they do not have other viable

options,atleastuntiltheyexpandtheirbusinessanddemon-stratetheirtrustworthiness.Therefore,itishardtoimaginehow microentrepreneurs who can already get access toindividualloanswouldaccepttodependonagroup(whichwould sound like taking a step backward). Second, con-trarytosmalleragglomerations,thecitizensoflargecitiestypically adopt a more individualistic attitude, making ithardertoconvincethemtosubmittopeer-lendinggroupsinordertoreceivealoan.

Based on our experience, the easiest way to work with solidarity groups, which is the program’s flagship, is in smaller towns. This is because people have known each other for a long time. They were born there. The friendship ties are very strong. In the large metropolitan regions, there always is some difficulty.[Rodrigo,programmanager]

Forthesereasons,theresistanceofmicroentrepreneursinRiodeJaneiromaybegreaterthaninFortalezatenyearsbefore. Based on these insights, and correlating with theliterature review previously presented, particularly thescenariosproposedbyHossain(1988)andHulme(1990),weproposethreeperspectivesregardingthereplicationofCrediAmigoinotherBrazilianregions.

Inthe first perspective,  it isassumedthatreplicationmight not be possible in some particularly challengingareas.Fortheseinterviewees,replicationmaynotsucceedin these areas, since the program would be confrontedwithat leastsomeof thechallenges itencounteredat themomentofitsimplementationinFortaleza,suchasclients’resistancetogroup-lending.Inaddition,theysuggest thatthemost challenging region for replicationwill certainlybe the Southeast (the most populated region), in view ofaspectssuchastheregion’shighlycompetitivemarketandtheexistenceofamoreindividualisticmentality.

Fromthe second perspectiveitisthoughtthat,inspiteofbeingchallenginginsomeareas,replicationwillprobablybe successful everywhere. This second group of inter-vieweesappearsmoreconfident regarding the replicationofCrediAmigo.MostoftheissuestheyconsideraschallengesforthereplicationofCrediAmigoareinfactfeasibleadap-tations.

I don’t see any problem of replication in the process, in the program’s methodology. Because we constantly improve, trying to mould our process to the reality on the field. We are always open to the demand, listening to all the possibilities and necessities that may emerge. [Hugo,programmanager]

From the  third  perspective,  it is considered that notonly could the replication of CrediAmigo be successfulthroughoutthecountry,butalocaladaptationtoeachcontextisnotevenperceivedasnecessary.

A lot of people (…) report the [popular] support that CrediAmigo enjoys in the Northeast. (…) Since CrediAmigo pertains to BND, they will be proud to participate [in the program]. [Leno,coordinator]

Challenges for Inclusive Finance Expansion: the Case of CrediAmigo, a Brazilian MFI 65

Comparing the answers of different relevant socialgroupsregardingthenegotiationprocessforthereplication,itisclearthatmanagers(MG)andcoordinators(CO)shareanumberofchallengesintheprocess.Managersmentionedallofthecoordinators’elementsplusothers,probablybecausetheyhaveawiderviewofthechallengestowhichCrediAmigoisconfrontedregardingitsexpansionandreplication.Thecoordinatorsapparentlygavemoreimportancetocriminalityasachallenge in largercities thandid theprogramman-agers.However,wecouldclaimthatthischallengeismoredependent on the context than all the others identified.Managers stressed the importanceofmarket competitionandtechnologicalhurdles(reachingclientsindistantareas)assignificantchallenges,whereasthecoordinatorsdidnotmentionit.Thisisprobablydue,asindicatedbefore,tothetypeofissueseachgroupisconfrontedwithonaday-to-daybasis,whichiswhattheyaremostconcernedwith.

methodoLogy-in-pRActice: the consequences of the impLementAtion of cRediAmigo

As a way to better understand the consequences of thenegotiation process that occurred in the course of theimplementationanduseofthemethodology,weaskedtherespondentstotalkaboutwhat they perceive as the conse-quences of the implementation of the CrediAmigo program. Table4showstheconsequencesoftheimplementationofCrediAmigoaccordingtorelevantsocialgroups.

Weoutlineherethetwomosthighlyranked:(1)expan-sionoftheclient’scommercialactivityand(2)citizenspur-chasinggoodsandserviceslocally.

Expansion of the client’s commercial activity:Itcan-notbeconclusivelyproventhattheimprovementinclients’living conditions through the development of their busi-nessesisduesolelytotheirparticipationintheCrediAmigoprogram.However,onecancertainlyarguethatsuchpartici-pation played an important role. As a program managerexplained:

I can’t guarantee that all of this increase in income was due to CrediAmigo. I can guarantee that CrediAmigo seems efficient, since the increase in income is very high, the increase in turnover is very high, and the exit from poverty of that client is growing. The speed at which that client exits poverty is 9% annually. The rate in other [organizations] such as BRAC in Bangladesh is 4-5%. So perhaps my credit is being efficient (...) but I can’t say that the microcredit has an impact of 9% of exit from poverty, because there are other factors included.[Gilberto,programmanager]

Astheclientsreceivetheirloan,theycanfirstincreasetheirinventory.Thecreditallowsthemtopaycashforthemerchandise,whichgives themright toadiscount.Afterawhile,theycanmakerenovationsintheirshopinordertoenlarge it.Doing this, theycanstockagreatervarietyofmerchandise,whichtranslatesintomoresales.Inothercases, clients who were selling their merchandise on thestreeteventuallycanaffordtohavetheirownshop.Someofthesepeopleachievethisrelyingsolelyonthecreditprovidedbytheprogram.

(...) people who did not have a shop, who were streets vendors, now have their own shop. People who were selling broth at public events now have their own place, at home. (…) We can clearly see that, today, three years later.[Emmanuelle,creditagent]

I was nothing! Today, I have a motorcycle (...) to get to deliver my orders [meals] faster. (...) This month, because we are at the end of the year, I had an increase (...) of 40%! [Joao,client]

Citizens  purchasing  goods  and  services  locally:  Atthebeginning,manypeoplehadtogodowntowntopurchasegoodsandservicesessentiallyfortworeasons.First,theycouldsimplynotfind thegoods theywere lookingforastherewasnotagreatvarietyofshopsintheneighbourhood.Second, few shop owners in the neighbourhood couldaffordtooffercredit totheirclients,whichobligedmanycustomerstopurchaseelsewhere.Asmorepeoplebecomeclients of CrediAmigo, and consequently succeed inexpandingtheirbusiness,thevarietyofgoodsandservicesofferedwithintheneighbourhoodincreases.Theprovisionofcreditprogressivelyallowsmoreshopownerstofinancetheirclients’purchases.Asthesechangesoccur,anincreasingnumberofpeoplestarttopurchasemoregoodsandservices

Table 4

Consequences of the implementation of CrediAmigo, by relevant social group

Consequences / Relevant social group

MG (3)

CO (2)

CR (3)

CL (6)

Total

Expansionoftheclient’scommercialactivity

2 2 4 8

Citizenspurchasinggoodsandserviceslocally

1 1 1 4 7

Acquisitionofnewgoodsandservices

1 2 3 6

Greaternumberandvarietyofshops

4 4

Moreemploymentopportunities

1 1 1 3

Accesstoabankaccountforthe“unbanked”

1 1 2

Morepublicservices(water,telephone,etc.)

1 1 2

Client’sover-indebtedness

1 1 2

66 Management international / International Management / Gestión Internacional, 15 (3)

within their neighbourhood, accelerating the neighbour-hood’seconomicdevelopment.Asaclientexplained:

When someone goes downtown: “Get this for me”. It is no longer necessary to go downtown. They know someone sells it in the neighbourhood and even offers the client to pay in multiple installments [as is the case downtown].[Margarida,client]

Thisprocesswasalsofacilitatedbythefactthatcreditagents explain to the clients the importance of spendingtheirmoneyintheneighbourhoodtofurtheritsdevelopment.

We credit agents, also have a social role, which is pro-moting economic development there. [We even encourage negotiation between people (...) promoting these people’s business, the purchase of merchandise between them... “If there is someone who can be a supplier, why would you go buy in Fortaleza if you have a friend here? Let’s go, let’s make a partnership with him”. We make a partnership, saying: “Look, this guy is my client, make a good price for all of my clients and I will talk about you and they will buy here”.[Leno,creditagent]

Withregardtothecomparisonbyrelevantsocialgroup,andtotheliteraturereview,wewillstressfourelements.

First,thereseemstobeadifferenceinthepresentationofthe consequences by the program managers, on the onehand, and the credit agents, on the other. The managerstendedtobemorecarefulwhendiscussingtheimpacttheprogram had on the clients and the neighbourhoods as awhole.Theyinsisted that theycouldnot tellwhatpartofthiseconomicdevelopmentwasduetoCrediAmigo,consid-eringthatavarietyoffactorshavecertainlyconvergedinsomeway.Still,theysuggestedthattheprogramprobablyhadanimpactastherateofdevelopmentwasconsiderablyhigh.However,thecreditagentsdidnothesitatetoconfirmthat the consequences suggested were attributable to theprogram. In fact, during the interviews, we repeatedlynoticedthatthecreditagentsweregenerallyverypositiveregardingthedevelopmentoftheprogramanditsmethod-ology,whichtheyseemedtoconsiderperfect.Forinstance,thelackofacriticalstancecanbeperceivedinthefollowingcomment,inwhichacreditagentdiscussestheconsequencesofCrediAmigointheclients’life:

“We are modifying [read: renovating] their houses”[Emmanuelle,creditagent].

Inthisstatement,thecreditagentdoesnotconsiderthattheclientdoesnotnecessarilycountsolelyonCrediAmigotofinancethewholeproject.Onealsofeelsastrongidenti-ficationwiththeprogramonthepartofthecreditagents.Consider,forinstance,thefollowingcomment:

The consequences were the best we could expect, because when the bank created this product, it clearly developed the region, since it is one of its objectives to develop the Northeast and implement in other States. And it certainly succeeded. Many people benefited from that project. Perhaps if there had not been this project, today, they

[clients] would be in the same situation as they were ten years ago; because there would not be any other way to be conceded an investment [loan] or training.[José,creditagent]

A number of motives may explain this difference instancebetweenmanagersandcreditagents,including:levelofeducation,experienceandpositionwithintheorganization.The insistence on getting the credit agents to stronglyinternalizethemethodologymayalsohaveinfluencedtheirperception.

Since credit agents are in the field most of the time,closertotheultimateclient,theytendtohaveamicroviewinsteadofanoverallviewoftheimpactofcredit,thoughthemostefficientagentsachievetomaintaina300-400-clientportfolio,asmallfractionofBNDoperations.Inaddition,itisreasonabletoassumethatthereturnpromotedbycreditagentactivitiesismoredirectlyaffectedbycreditperform-ance. For this reason, the agent tends to have a strongincentivetoemphasize,evenexaggerate,thebenefitsoftheextendedloans.

Second, the addition of public services within theneighbourhoodwasnotamongtheconsequencessuggestedbyclients.Thisomissionmaynotbeacoincidence,particu-larlyconsideringthattheclientscomprisesixrespondents,the largest relevant social group. Now it is reasonable tothinkthattheadditionofpublicservices(atleastthosemostvisible,suchasinfrastructureprojects) takesplaceessen-tiallyinpooreranddistantneighbourhoods,thosethataremostunderservedbylocalgovernments.TheCrediAmigoclientswholiveinthesepoorerareasusuallyreceivealoanthrough the product Comunidade (communal banks), bywhich theprogram lends loweramounts to largergroupsthanisthecasewithsolidaritygroups.Thisbeingsaid,theclients we interviewed are part of solidarity groups anddon’tliveinthosepoorerareas.Therefore,theymightnotwitness as many changes in provision of public serviceswithin their neighbourhood. As a result, they would nottend to bring up this issue during the interview. Shouldthisconclusionbeconfirmed,theimportanceoftheconse-quencediscussedhereshouldbeputinperspective.

Third,theformalizationoftheclientthroughprovisionofabankaccountwasnotsuggestedasaconsequencebytheclients.Ontheonehand,itmaybethattheclientsdidnotmentionthisconsequencebecausethequestionfocusedon thedevelopmentof theirbusinessandneighbourhood.Anotherexplanationisthatclientsdonotconsiderthepro-visionofabankaccount,say,asanimportantstepintheirlife.Notethattherespondentswhomentionedthisconse-quenceasimportantdidnotsuggestthatclientsperceiveditassuch.

Fourth,theincreaseinthenumberandvarietyofshopswithintheneighbourhoodwasonlysuggestedasaconse-quencebytheclients.Wemaythinkthattheothergroupsdid not mention it because they were not asked directlyabouttheconsequencesfor the neighbourhood.Following

Challenges for Inclusive Finance Expansion: the Case of CrediAmigo, a Brazilian MFI 67

thesamelogic,theclientswouldhaveprovidedthisanswerbecause they had been asked this specific question andbecausethisconsequencemaybethemostevidentchangeforaclienttonotice.

Conclusion

Inthispaper,wesoughttoincreaseourunderstandingoftheconditionsfacilitatingthereplicationofagivenmicrocreditmethodology–CrediAmigo– in agiven context, that ofBrazil.Theanalysisoftheempiricalmaterialwasguidedbyatheoreticalframeworkintegratingfourmainconcepts,namelyrelevantsocialgroups,interpretiveframes,negotiationprocess and methodologies-in-practice. The results werecomparedtotheliteraturereviewandtheywerealsocom-pared by relevant social group, as the perception of theprogrammanagers,coordinators,creditagentsandclientsregarding each of the questions asked could differ. Ourfindingscorroboratethatdifferentsocialgroupsmighthavediverging and/or converging views on important issuesrelatedtothereplicationofCrediAmigomicrocreditmeth-odology and that taking these different perceptions andexperiencesintoaccountislikelytoimprovetheimplemen-tationprocess,increasingthereplicationprocess’chancesofsuccess.

In termsofconcretepractical contribution formicro-finance practitioners, the results of our study have thepotential to help managers of microcredit institutions orprogramsaswellasBrazilianpolicymakers.Weprovidebelowfourrecommendationsthatmayhelptocreatecondi-tionsthatfacilitatethereplicationofmicrocreditmethod-ologies fromone context to another.Although theyweredevelopedfromtheinvestigationofaparticularmethodol-ogy–CrediAmigo–inaparticularcontext–theBrazilianone,westronglybelieveintheplausibilityofgeneralizingthese recommendations to other methodologies (mainlysolidaritygroup-basedmethodologies)andothercontexts,evidently with reflexivity and caution and open to futureinvestigation.

InthecaseofthereplicationofCrediAmigo,focusonpeer selection and enforcement at the initial stage of theimplementation, and refocus on the credit agent’s role astheprogrammatures,wereperceivedastwoessentialprin-ciplesthatcontributedtothesuccessoftheimplementationintheNortheastofBrazil,particularlyinFortaleza.Thesetwoprinciplescouldbeimportanttothereplicationofothermicrocreditprogramsusing thesameunderlying logicasCrediAmigo,i.e.,thesolidaritygroups.Therefore,

Recommendation 1: We suggest that managers repli-cating microcredit programs based on solidarity group methodologies from one context to another should pay special attention to these two principles – peer selection and enforcement and commitment of the credit agent.

Becausedifferentsocialgroupsinvolvedinthereplicationofamicrocreditmethodologyare likely tohavedifferent

perceptions of the most important principles to be takenintoaccountduringtheprocess,itisimportanttobeawareofthesepotentialdifferences. Therefore,

Recommendation 2: We suggest that managers respon-sible for the replication of microcredit methodologies pay attention to different perceptions held by different social groups. Those perceptions may be divergent or conflicting. In that case, they should be addressed purposefully. They may be convergent or complementary. In this case, each group can bring different angles and experiences that, together, can help improve the implementation process and increase the chances of success of the replication process.

Becausedifferentconditionsarelikelytoconstitutebar-rierstothesuccessfulreplicationofamicrocreditprogram,itisimportanttobeclearonwhattheseconditionsareandthebestwaytocopewiththeminagivenreplicationprocess.Doingthisshouldincreasethechancesofachievingasuc-cessful replication. Among the conditions considered asbarrierstoreplicationintheliterature,culturalconditionsemergedasparticularlyimportant.Therefore,

Recommendation  3:  We suggest that managers in charge of the replication of microcredit programs pay attention to these cultural conditions in order to better adapt to the locality where the program is being imple-mented.

Entering a highly competitive market such as Rio deJaneiroorSaoPaulocanbegreatlyfacilitatedbyestab-lishingapartnershipdealwitha localorganization.Thisinitiative can provide the organization implementing amicrocreditprogramwithinitialcontacts,aclientportfolio,andanamerecognizedlocallythatstrengthenstheorganiza-tion’spositioninthemarket.Inaddition,seekingtoincludeindividualsfromthelocalcommunityintheorganization’simplementationteammayhelptoeasetheprogram’sadap-tation,furtheringorganizationallearningand,consequently,flatteningitsorganizationallearningcurve.Therefore,

Recommendation  4:  We suggest that managers rep-licating microcredit methodologies in highly competitive markets search for local partnerships likely to increase their understanding of the local context, namely through tacit knowledge transfers.

Thesefourrecommendationsrepresentthemaincontribu-tionofourstudyforpractice.Fromatheoreticalperspective,theresultsoftheanalysisbringnewlighttotheliteratureonmethodologyreplicationbyconfirminganumberofasser-tions,suggestingnewones,andsometimeschallengingcur-rentpositions.Toillustratethis,letusconsidertwothemesdiscussedintheanalysisanddiscussionoftheresults.First,among the perceived main principles of the CrediAmigomethodology,oneconfirmed the literature (“peer lendingand enforcement”), whereas others (“commitment of thecredit agent” and “management’s monitoring process”)couldbeconsideredcomplementarytoexistingliterature.Second,of the conditions that facilitated the implemen-tationofCrediAmigoinFortaleza,someconditionswere

68 Management international / International Management / Gestión Internacional, 15 (3)

perceived as more significant than what the literatureactually suggests (e.g., “cultural conditions”). These newconsiderationsenrichtheliteratureandmayhelpmanagersandpolicymakerstocomeupwithstrategiesandpracticesbetter suited to the provisionof microfinance services indifferentregionsandcitiesofBrazil.

OurpaperalsoprovidesmicrofinancescholarswithafreshinvestigationofthereplicationofaBrazilianmicro-credit model, beyond the typical studies on internationalreplicationof,say,theGrameenBank(Bangladesh)orBankRakyat (Indonesia). Interestingly, it shows how regionalspecificitiesmayimpactthesuccessofareplicationtakingplaceatthenationallevel,insteadofinternationally.Basedontheresultsweobtained,wemightthinkthatbeforeana-lyzingaphenomenonascomplexastheinternationalrepli-cationofamethodology,itisusefultoinvestigatereplicationinitiativestakingplacewithinnationalboundaries.

Althoughourresultsarerelatedtoourspecificresearchquestion,weconsiderthemtohaveanimportantpropertyofrelevantresearchcontributions–theyareplausible.SuchplausibilityincreasesthepossibilityoftheseresultsbeingtransferabletoothercontextsthantheBrazilianone,asourfourrecommendationsintend.

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