Analisis de Estrategias de Movilizacion de Ahorros de Instituciones Microfinancieras Bolivianas Estudios de Caso: Bancos Solidarios S.A. (BSO) y Cooperativa de Ahorro y Credito San Martin de Porres S.R.L (CSM) (Spanish)

Publication Date: Jan 2000
Published by: GTZ and FinRural
Document Type: Paper (PDF)

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Savings mobilization in Bolivian financial institutions

This paper analyzes the savings mobilization strategies of two different types of financial institutions in Bolivia: 1) Banco Solidario S.A. (BSO), the first fully licensed commercial bank in Latin America whose origins lie in PRODEM, a non-profit microcredit NGO 2) Cooperativa de Ahorro y Crédito San Martín de Porres S.R.L (CSM), one of the largest and oldest cooperatives with presence in the rural areas.

The author argues that the regulatory reforms in the Bolivian financial sector as well as the bankruptcy of many mainstream commercial banks during the nineties had a big influence in the operations of each of these financial institutions.

This paper uses these two Bolivian case studies to provide answers to questions such as:

• What are the advantages and challenges of savings mobilization?
• Which are the factors that are crucial for a successful product design?
• Which are the best channels to promote the uptake of voluntary savings products?
• How regulatory factors such as legal status and licensing of an institution can be beneficial or detrimental to savings mobilization?

Key takeaways of this study are:

• Mandatory savings had a negative impact on the savings mobilization of BSO because it distorted people’s perception of savings. Many of them had a mistaken notion that deposits were lost assets that could only be managed by their loan officers.
• Gaining the trust of local leaders and social networks is vital to reach target groups and attract more savers.
• While BSO has strengthen its reputation and capabilities due to its banking license, CSM’s growth and reputation are constrained by the SBEF’s delays in processing their liciensing.