Strategic Alliances for Scale and Scope Economies: Lessons from FADES in Bolivia

Topic :

The case study of FADES in Bolivia makes an interesting case for non-traditional financial linkages. FADES, a non-regulated NGO and the third largest MFI in Bolivia, decided to enter into strategic alliances with several public and private institutions, with the sole purpose of expanding its rural outreach, despite the existence of restrictive legislation and infrastructural constraints. These linkages resulted in new services becoming available to old, and new clients, since the partnerships brought with it inherited clients. The new services range from additional financial services (e.g., remittances, deposit mobilization) to the payment of utilities and social programme benefiting the elderly.

This article introduces FADES’ innovative range of diverse linkages, and share initial results. The authors advice to the the readers is to follow FADES’ progress, and continue to learn from this interesting linkage “laboratory”.

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