Linking BDS to Financial Services: The case of Financiera Solucion in Peru, de Ruijter de Wildt/ILO, 2004

    As a consequence, the ILO called for more in-dept research on the ins and outs of linkages and planned a case study that was to emphasise the costs and benefits for clients. This document presents the results of that case study that has been an assessment of Financiera Solución in Peru. Financiera Solución is a commercial enterprise that by way of a bonus, freely offers the ILO-developed training Improve Your Business to its best clients. The case presented here portrays a pioneering example of linkage in one of the most developed microcredit markets of Latin America.

    Summary of results
    It is most likely that the benefits of linking training to microcredit outweigh the costs for both the credit provider as well as for the clients. More than 90 percent of the 114 clients that were interviewed saw benefits in the linkage as developed by Financiera Solución. A fact is that more than 80 percent of the total survey indicated a need for training.

    Only 5 percent of those 66 that did not attend the training did not do so because they felt they did not need the training. Those 48 microenterprise clients that had taken the IYB training were more positive on the current situation of the enterprise, saw their own management as one of the main tools to influence performance, and importantly, had added more jobs than those who did not take the IYB training. Without doubt, those that attended the training are more growth oriented than those that did not.

    The nature of the research could not verify whether growth orientation is a result of the training or whether the linkage automatically selects growth oriented enterprises to attend, but two thirds of those trained in IYB mentioned that it did have noticeable positive effects on their business.

    The answer to the bottom question, whether it is a successful model, appears to be yes. Nevertheless, it seems that the model as such has not totally matured as yet. The implementation is not as regular as was planned, evaluation and monitoring are still weak, and there is a problem concerning the responsiveness to more specialised training. It is highly questionable whether credit agents could and should provide those more specialised trainings.

    A more adequate solution would be when Financiera Solucion would act as a facilitator between their client and existing BDS providers in various areas, facilitating market access for growth oriented enterprises.

    Associated Activities and Documents
    Synthesis Documents
    »Synergies through Linkages: Who profits from linking micro-finance and BDS? Sievers and Vandenberg, 2007