Case 1: Bolivia Economic Essay Sample

Case 1: Bolivia

The chief choice that the FIE had at it vicinity was to change the non-profit institution into a bank. The merit of this preference is that the institution would be competent to get hold of the money from the central bank, which the organization needs to a great extent. This will at last offer FIE a better trustworthiness with its creditors. This decision has a chief hindrance in that by this undertaking, the FIE will oppose all ideologies it is based on. The second choice was to go for FFP monetary entity. This alternative was beneficial in that the company would still rejoice in numerous merits of a bank, however still be excused from particular laws. This choice, nevertheless, would isolate customers similarly to the first option, it was opposing the organizational dream. The third choice was looking for new sources that will aid take care of its monetary disasters. This choice would aid the FIE stay as a micro finance, thus upholding its first dream. Nevertheless, the chief drawback in pursuing this option is that the organization would be in danger as its rivals have obtained other status as well as having exceptional loan portfolio.

So as to enforce the afore-mentioned choices, FIE has to endure a number of organizational alterations. First, the institution would have to alter its administration. This is due to the fact that most of the leaders do not have the necessary abilities to operate a bank. The other alteration would be adjustment in technology as well as commodities. This adjustment would go well with the status of FFP financial bodies. The other alteration would be bringing in training courses to teach the workers on the latest commodities as well as on running the new organization.

Whenever executing the aforementioned adjustments, the FIE is destined to encounter certain organizational as well as societal difficulties. Firstly, the workers might not be willing to hold on the new adjustments or they are unaware of the learning programs. The customers might as well not have that vigilance to cherish the new commodities. Some local managers will go against the alterations leading to internal clashes. In addition, the culture as well as capability of the FIE to go through this type of institutional change would be a great difficulty as well.

Micro finance works miracles in Bolivia as well as other growing nations getting rid of poverty by offering small loans to the deprived without demanding collateral, due to the fact that the do not have right of entry to other monetary organizations. Micro finance could excel in this role exceptionally by shunning unions with money lenders or open rivalry with banks as they do not have mutual dreams. Additionally, banks as well as micro finance organizations have diverse kinds of customers. They can undertake this function well by adhering to their goals. The FIE theory is apt in other settings, particularly where there is no rivalry because it is the best manner to offer monetary services to the deprived people.

In my endorsement, I would wish the board to improve operational systems to strengthen internal monetary mechanism. I would as well commend for instant eradication of liquidity problems to gratify client needs. This can be accomplished via getting FFP status that will make it easy for the organization to acquire money from the central bank. The FIE ought to include its culture with the superintendence’s rigid control devoid of losing concern on its dream.  At last, the organization ought to enhance its products and services they offer to endure the surging rivalry posed by their opponents.