Case Study

Mergers in Microfinance: Twelve Case Studies

What are the ten lessons for mergers?

The book offers detailed case studies of the process of mergers including successful mergers for FORA Fund, Russia; Thaneakea Phum, Cambodia (TPC); Enlace/Catholic Relief Services, El Salvador; Opportunity Microfinance Bank, Philippines; ACCION USA and Working Capital, Massachusetts USA; Asala, West Bank/Gaza; World Bank Local Initiatives Project, Bosnia-Herzegovina; XacBank and Goviin Edhlel (GE), Mongolia; Financiera Confia, Nicaragua; Financiera El Comercio, Paraguay. and unsuccessful mergers for PRODEM and FIE, Bolivia and Eco Futuro, Bolivia

Each case study is divided into sections:

  • Background: Summary of each merging organisation?s history, country context and lending environment, and principle reasons for (or against) the merger;
  • Merger negotiations: How the idea of the merger evolved, who initiated it, the main parties involved, and potential resistance to the merger that either party faced;
  • Legal structure: Types of legal structures possible for microfinance activities in the given country, principle reasons for the type chosen for the merged entity, and how the legal transfer process worked;
  • Planning: Key decision makers, implementers, and process for pre-merger strategic planning and post-merger integration;
  • Timeline: Planned versus actual timelines for the merger process, major phases, and rough timeframe for each step;
  • Lessons learned: Principle lessons learned, issues that could have been handled more easily, and advice for others considering a merger in the future.

Presents ten lessons for mergers:

  1. Stay true to mission, never lose sight of vision;
  2. Build trust?before, during, and after;
  3. Get buy-in at every level;
  4. Find a leader;
  5. Be realistic;
  6. Be prepared;
  7. Be extra sensitive to culture?before, during, and after;
  8. Communicate, constantly;
  9. Find a neutral outsider to help;
  10. Maintain momentum, and persevere.

About this Publication

By McCarter, E.