microREPORT #23: Opening Markets Through Strategic Partnerships: Analysis of FIE and ProMujer Alliance

The Fomento a Iniciativas Economicas (FIE)/Programa para la Mujer (ProMujer) linkage described in this case study presents an interesting demonstration of how a regulated finance company, FIE, is able to leverage the branch infrastructure linkage of an NGO, ProMujer, to offer deposit services. Through this linkage, FIE is able to capture deposits from thousands of new clients without building new branches and ProMujer is able to offer regulated deposit service without transforming into a regulated financial institution.

This case study was chosen as an example of two institutions that chose to collaborate in order to better their positions within the highly competitive Bolivian microfinance market. Increased competition, combined with a decreased availability of donor funds, has pushed Bolivian MFIs to become even more innovative, client-focused, and efficient. This innovative alliance allows each institution to offer more services to clients at a lower cost than they would have been able to achieve on their own. Although the Bolivian microfinance market is in many ways unique, there are important lessons to be learned from the challenges that FIE and ProMujer faced in creating their alliance by other institutions contemplating similar arrangements.

The fundamental hypothesis of this case study is that, under the right conditions, strategic alliances can increase the scale and scope of services, improve efficiency, and lower costs for both the institution and the client.