State-Owned Retail Bank (SORB) Research under AMAP FSKG

Research on State-Owned Retail Banks (SORBs) under AMAP FSKG was motivated primarily by the relevance of state-owned banks to rural and agricultural development, as well as the increasing prevalence of SORBs (like Banco do Nordeste) or former SORBs (such as Khan Bank) in microfinance. USAID’s experience promoting SORB reform offers valuable opportunities to gather lessons that practitioners have learned in the process of transitioning these institutions to more efficiently serve their target communities.

To understand the effect of SORB closure a case study of the Banco Agrario del Peru (BAP) was undertaken. It determined that, although government officials assumed the private sector would fill the gap left by the bank’s closing, that gap persisted for five years until another government-sponsored bank was founded to replace BAP. Five other case studies—looking at the Land Bank of the Philippines, Banque du Caire Egypt, Amhara Credit and Savings Institute in Ethiopia, Banco do Nordeste in Latin America, and Mongolia’s Khan Bank—examined successful instances of reform followed by the rapid growth of microfinance services offered by SORBs.