Study on Delinquency Levels and Portfolio Quality of the Microenterprise Bank—Peru

Credit risk is a challenge facing the banking sector. The problem of asymmetric information causes credit markets to function inefficiently. In the short term, delinquency problems cause liquidity problems, and in the long term, in the absence of contingent credit lines, this problem can become a solvency problem, which can ultimately lead to the liquidation of the institution. The research team in Huaraz, Peru, set out to determine the impact of delinquency on the quality of the microenterprise bank’s portfolio. S/. 4,024,000,000,000 in outstanding loans (including contingent loans) of the microenterprise bank represent 3.32% of all bank loans and 27.8% of all bank loans to small and microenterprises. The performing portfolio of the Huaraz branch went from S/39 176 573 in 2020 to S/44 708 395 in 2022, an increase of 14.1 percent, while the portfolio at risk went from S/3 472 347 in 2021 to S/4 588 202 in 2022, an increase of 43.55. What is the correlation between delinquency and portfolio quality in Mibanco Peru? Is the general question that motivates this study. The study was explanatory in nature; data were collected from BANTOTAL reports (Mibanco’s nationwide reporting system) and analyzed in SPSS and Excel to reveal trends in delinquency and portfolio quality over a 24-month period. The study revealed that delinquency in the Mibanco—Huaraz Agency actually improves portfolio quality.