Institutional transformation to create linkages that enhance rural access to financial services: the case of the Fundación Integral Campesina (FINCA) in Costa Rica*

Today FINCA/Costa Rica, originally established in 1984 as a village banking programme with a resource intensive model of creating and funding village banks, has emerged as an organization highly specialized in the creation and linking of incorporated village banks with financial and non-financial actors in Costa Rica, El Salvador, Guatemals, Honduras and Nicaragua. The case study describes FINCA/Costa Rica’s revolutionary process of institutional innovations over the last 20 years culminating in the transformation from a financial apex organization to developer of the revolutionized village banks in order to improve opportunities for linkages that enhance rural access to financial services. The authors end the case with several lessons on the importance of organizational flexibility to adjust, strengthening institutional capacity to meet the growing needs of the organization especially as it pertains to personnel and MIS development and creating partnerships and alliances with both public and private entities. Caution is highlighted on the risks of conditionalities embedded into inter-institutional linkages and the unrelenting risk of the state using the partnership for political purposes.