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Abstract

Why would an NGO (non-governmental organisation) take over a commercial bank? Interestingly, a US-based NGO, Mercy Corps, took over an Indonesian commercial bank, Bank Andara, in 2008. Mercy Corps, through its acquisition of Bank Andara is aiming at the financial inclusion of the Indonesian poor by extending its support to the local microfinance institutions, both in the form of financial and technical assistance. In the process, the bank intends to operate as a self-sustainable model by generating revenues on its own rather than relying on aid. However, with the decrease in charitable giving, NGOs such as Mercy Corps are fast realising the need to increase their reach to the poor by adopting a corporate approach towards resolving social problems. This case also enables understanding of how Mercy Corps is coming out with innovative approaches to tackle some of the long-existing social problems, effectively. It provides insights about how Mercy Corps' 'community-led and market-driven actions' are helping the distressed to overcome the challenges of difficult times. The case particularly raises an interesting discussion on how social entrepreneurs are using profit ways to achieve social objectives and whether these can be accomplished with a commercial approach (in this case, acquisition of a commercial bank).
Location:
Other setting(s):
2009

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Abstract

Why would an NGO (non-governmental organisation) take over a commercial bank? Interestingly, a US-based NGO, Mercy Corps, took over an Indonesian commercial bank, Bank Andara, in 2008. Mercy Corps, through its acquisition of Bank Andara is aiming at the financial inclusion of the Indonesian poor by extending its support to the local microfinance institutions, both in the form of financial and technical assistance. In the process, the bank intends to operate as a self-sustainable model by generating revenues on its own rather than relying on aid. However, with the decrease in charitable giving, NGOs such as Mercy Corps are fast realising the need to increase their reach to the poor by adopting a corporate approach towards resolving social problems. This case also enables understanding of how Mercy Corps is coming out with innovative approaches to tackle some of the long-existing social problems, effectively. It provides insights about how Mercy Corps' 'community-led and market-driven actions' are helping the distressed to overcome the challenges of difficult times. The case particularly raises an interesting discussion on how social entrepreneurs are using profit ways to achieve social objectives and whether these can be accomplished with a commercial approach (in this case, acquisition of a commercial bank).

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Location:
Other setting(s):
2009

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