Bank-Microfinance Alliances: FINCA's Pilot Program for Prepaid Cards in Mexico
This case study documents FINCA's experience in planning and negotiating a bank partnership with HSBC in Mexico to launch prepaid bank cards. FINCA's decision to pursue a bank partnership was based on several goals such as, to reduce operational costs, offer new and useful products, increase the flexibility, convenience, and security of services for clients, and bring clients into the formal financial sector. FINCA aimed to achieve these goals by adopting a card-based disbursement system and integrating it with other financial products, providing points of sale throughout Mexico, and expanding its branch network. Partnering with banks comes with unique advantages and challenges, and can be a difficult process for an MFI. FINCA's experience provides the following insights for MFIs considering similar alliances:
- Take small, manageable steps;
- Understand how the bank views your joint activity;
- Start negotiations early and prepare for lapses in communication;
- Leverage information from all institutional levels;
- Know your options for products and services;
- Understand how banks work and make decisions;
- Make negotiations a competitive process.
