Case Study
Banco Caja Social (BCS), Colombia (Case Study)
What are successful strategies in savings mobilisation?
44 pages
Using Banco Caja Social (BCS) of Colombia as a case study, this paper presents the findings of the Consulatative Group to Assist the Poor (CGAP) on savings mobilisation. This paper:
- The macroeconomic context of Colombia, the financial sector, and the social and cultural context;
- Undertakes institutional analysis of the BCS, particularly of its characteristics, governance and organisational structures;
- Explores its demand-oriented savings products and technologies.
- Looks specifically at the characteristics of two simple products:
- Traditional deposit accounts, "passbook savings" and time deposits designed as an entry ticket to credit and based on the principle of reciprocity to meet different types of demand.
- Also the design of savings products such as voluntary savings, "Grow Every day" savings account, "Subediario", and "Everyday" semi-liquid savings account with fixed terms, "diadia".
The author concludes that there are three driving forces that explain the success evolution of BCS, especially in the area of savings mobilisation:
- The reform of the financial sector introduced fundamental changes. The exceptional institutional type of savings bank was abolished and BCS had to transform into a commercial bank;
- New prudential regulations that adhered largely to international standards were enforced;
- This new framework forced BCS to improve risk and liquidity management and to strengthen their capital base.
These three aspects are crucial for the protection of savings. [Adapted from the author's abstract]
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