SUMMARY- Cajas Externas in Bolivia:
A Stategic Alliance to Increase Savings in Under-Served Markets

By Hillary Miller Wise (October, 2004)

http://www.seepnetwork.org/content/library/detail/1061

Abstract

This presentation analyzes Cajas Externas - which are a result of a partnership between FIE (a regulated financial institution in Bolivia) and ProMujer (non governmental organization). The partnership allows ProMujer clients to utilize specialized FIE teller windows in ProMujer branches to manage their credit payments and deposits.

Some features behind this alliance are:

Legal framework in place allowed both institutions to work together

Strong relationship between leaders of this organizations gave enough trust for the alliance to be successful, but lack of planning for the future may bring both institutions to different paths.

Both organizations have benefited from this alliance.  FIE has been able to access all of Pro Mujer‚Äôs clients, who used to has a larger outreach.  Pro Mujer has a competitive advantage over other non-regulated institutions.

Summary

The partnership between FIE (a regulated financial institution in Bolivia) and ProMujer (non governmental organization) gave birth to the project ‘Cajas Externas’ or external tellers. The project consists of placing FIE’s teller windows in ProMujer branches, in which Pro Mujer’s clients can:

Encash their loan disbursement cheques;

Make their loan payments and deposits;

Pay their utility bills.

Negotiations between the two organizations began in 2001 after the legal framework allowed regulated and non-regulated institutions to form alliances. They finally signed a 4-year agreement in 2003 in which FIE would take deposits and manage transactions for Pro Mujer clients, but they could not offer credit to Pro Mujer’s clients.

The alliance has been successful as shown by the following achievements:

Over 13 teller windows opened throughout Bolivia;

US$2.7million mobilized in savings through the alliance;

Efficient operations – costs of the teller windows less than the cost of funds from NAFIBO, the second-tier bank in Bolivia.

However, threats and challenges of this partnership must also be considered:

• Internally, employee morale is suffering because of the duplicity of work, given that tellers are not online and that there was not sufficient training or internal marketing.
• The two organizations are following diverging paths and the lack of strategic planning for the future of the alliance is threatened.  Moreover, donors do not seem to be willing to continue to fund the alliance