The increasing supply of microfinance services in Peru contributes to the present
difficulties in attracting potential participants to these Communal Banking (CB)
schemes. During the period of 1994 to 2000, the number of microfinance
organisations (MFOs) in Peru has almost doubled, from 19 to 37, many of which are
major competitors of the CB programme (SBS 2000). The implication of this is that,
in many instances, officers do not have any other option but to help form groups
composed of people who live in highly dispersed geographical areas and who possess
very little knowledge about one another.