Corposol/Finansol Case Study: Lessons For Commercialization
This paper presents an analysis of transformation of non-government organizations (NGOs) into commercial, regulated institutions through the case study of Corposol (a microfinance NGO)/Finansol (a commercial finance company) in Colombia. The paper traces the growth and development of Corposal/Finansol and identifies institutional issues involved in the transformation of NGOs into commercial entities.
The author proposes that for NGOs to successfully transform into commercial institutions, they require to:
- Increase the autonomy of the regulated institution (commercial institution);
- Apply consistent performance objectives;
- Manage growth;
- Design channels for board intervention;
- Manage product diversification effectively;
- Increase communication between the regulated institution and the NGO;
- Commit to transparency;
- Avoid centralized control;
- Focus on the mission and not on public expectations.
The paper emphasizes the importance of defining the roles of each organization distinctly, and in concert with its ultimate responsibilities. The paper concludes that a strong board is an insurance against concentration of decision-making powers in the hands of one or two executives.
