Linking Business Development Services to Financial Services: The case of Financiera Solución in Peru

Small enterprise development has two intervention areas: Financial Services (FS) and nonfinancial services, recently known as Business Development Services (BDS). Although FS and BDS have largely been detached over the past decade, there is a renewed interest to explore the possible synergies between the two types of services. In early 2003, the ILO carried out a desk-research to identify existing linkages worldwide.

This study was the first attempt to systemise the different ways in which these services are linked and the desk-research explores the costs and benefits for the three different interest groups of FS providers, BDS providers and the small enterprise clients. The overall conclusion is that in practice, a good number of financial services are actually linked to BDS, but that little has been done to identify the applied models and to pinpoint the costs and benefits. Obviously, this lack of adequate data impedes the development of a best practice model that could be of great value for practitioners in search of effective services delivery to small enterprises.

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.