Good market position in the Peruvian micro-lending sector; Adequate risk-adjusted capitalization; and Ample space for future growth through its pulverized deposits. Intense competition which could pressure margins and increase nonperforming assets (NPAs); and Higher-than-average credit losses pressuring the bank's risk position. The negative outlook on Peru-based bank MiBanco, Banco de La Microempresa S.A. (Mibanco) reflects the deterioration in Mibanco's asset quality metrics. Given the bank's current NPAs and charge-offs, its moderate asset quality metrics weigh heavily on Mibanco's risk position. If Mibanco is not able to control this deterioration, bringing down both its NPAs and charge-offs ratios to about 4.5%, we will revise our risk position assessment to "moderate" from "adequate." This will result in a lower stand-alone credit profile
