Document Type

Honors Paper


Maria Cruz-Saco

Publication Date



This thesis examines the growth and development of the financial sector in Ecuador, focusing in particular on the products and services offered to low-income individuals, including, but not limited to microfinance. I examine the current problem of over-indebtedness, and evaluate both the supply/institutional side as well as the demand/client side. I conclude that while the market for microfinance institutions and low-income products and services is highly saturated and very developed, governmental interventions, structural problems and lack of accompanying financial capabilities have limited the effectiveness of the industry, and perpetuated indebtedness. I propose mandatory financial education programs provided by all financial institutions that target low-income clients in particular. This policy recommendation will improve the current microfinance model by increasing client financial knowledge, hence mitigating the harmful consequences of governmental intervention in the financial system.

Included in

Finance Commons



The views expressed in this paper are solely those of the author.