Managing the Growth of Microcredit Programs: Human Resource Management Including Recruiting, Training, and Motivating Staff

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1 Managing the Growth of Microcredit Programs: Human Resource Management Including Recruiting, Training, and Motivating Staff By Dr. Mostaq Ahmmed Mission of PlaNet Finance Fight Against World Poverty!By Supporting the Development of Sustainable MicroFinance Institutions ("MFIs") Worldwide Through Human Resource Development and the Effective Use of Technology. PlaNet Finance s activities are based on four main objectives described below, in order to provide support to MFIs, governments and the microfinance industry at large: Þ Reduce the digital divide (technological assistance) by connecting MFIs to the rest of the world by providing them with computers, Web site creation and hosting under PlaNet Ring and specific IT training Þ Transfer knowledge and build capacity of micro-finance practitioners, by providing training through an online university dedicated to microfinance and information technology, a virtual library on microfinance and information sharing and training activities in the field Þ Increase transparency by establishing a rating system specific for the MFIs Þ Increase funding dedicated to MFIs and micro-entrepreneurs via PlaNet Finance Revolving Credit Fund, an international debt fund helping young MFIs to build their own credit history. PlaNet Finance worldwide Permanent Offices and Programs Belgium United Kingdom Franc Mexic United Moroc Benin / West Italy India / South China Regional Action Zone Fundraising & R Operations Brazil

PlaNet Finance s activities are based on four main objectives described below, in order to provide support to MFIs, governments and the microfinance industry at large: Þ Reduce the digital divide

2 Achievements of PlaNet Finance Achievements Over five years of its existence, PlaNet Finance has supported over 708 MFIs reaching over 3 million microentrepreneurs. Over 29 of these MFIs have been directly funded. 100% of the loans have been reimbursed in due time Financing by loans Knowledge Total disbursed financing: 295,000 Number of MFIs referenced: 2,299 Number of MFIs financed: 29 Number of MFIs trained: 477 Number of individuals financed: 7, 629 Number of professionals trained: 1,698Rating Technology Number of MFIs evaluated : 61 Total number of MFIs supported with IT: 89 Financing disbursed after rating: 2,150,000 Number of MFIs equipped: 100 Individuals financed after rating: 3,630 Number of MFIs in the Ring: 228 OPERATING ENVIRONMENT ASSESSMENT Demographic, Political-legal (population, growth rate, desnsity, age, etc.), Socio-economic status (Education, religion, culture, ethnicity, GDP, Inflation, interest, PP, poverty rate, unemployment). Competition and resource availability (Com. & trans. Facilities, bank service providers) Support from local authorities DEVELOP MICROFINANCE PROGRAM Working area and target group Right products and services Product management and service delivery mechanism Monitoring and supervision system DETERMINE WORK PLAN Staff training and motivation Branch office set-up Staff deployment Recruitment of staff Relative Skills Needed for Efficient Performance at Different Management Levels in Human Resource

100% of the loans have been reimbursed in due time Financing by loans Knowledge Total disbursed financing: 295,000 Number of MFIs referenced: 2,299 Number of MFIs financed: 29 Number of MFIs trained:

3 Key Elements to Achieve Institutional Sustainability Institutional Strength and Efficiency are Vital to Institutional Sustainability Structural Strength Human Resource Planning and Development Need-Based Training Working Environment Chain of Command Operational Efficiency Good Communication and Understanding Management Efficiency The HRM Process for MFIs Human Resource Planning Recruitment Selection Socialization Pre-Service Orientation and Training Performance Appraisal Promotions, Transfers, Demotions and Separations The HRM Process for MFIs 1. PLANNING FOR HUMAN RESOURCES Competitive environment Staffs shortages and expansion plan Changing demographics Current and expected skill needs Vacancies and organizational expansions and reductions, etc 2. RECRUITMENT Developing a pool of job candidates in line with the human resource plan MFI s recruitment methodology Non-conventional & innovative recruitment procedure 3. SELECTION PROCEDURES 4. PRE-SERVICE ORIENTATION & TRAINING METHODOLOGY Application forms/resumes Interviews Employment and skill tests Need basis training Learning by doing and practical training module Designed to improve skills and knowledge of field staff and mid level management

Selection Socialization Pre-Service Orientation and Training Performance Appraisal Promotions, Transfers, Demotions and Separations The HRM Process for MFIs 1.

4 through built in process 5. SOCIALIZATION PROCESS Newly recruited staff to become familiar Share their ideas in day-to-day work Newcomers are introduced to their colleagues Acquainted with their responsibilities Informed about the organization s culture, policies 6. PERFORMANCE APPRAISAL Individual s job performance Objectives developed for the individual s position Low performance may prompt corrective action - such as additional training Promotion BRANCH LEVEL - Branch Manager - Senior Credit Officer - Credit Officer Implementation, Operation, Supervision and Monitoring Division of Work at Each Level Regional Manager Level Supervision and DIVISIONAL MANAGER LEVEL Supervision and CENTRAL COORDINATION TEAM Policy Making, Supervision and Monitoring MANAGING DIRECTOR development Policy Making and

5 Why MFIs Need Micro Finance :Training and Technical Support? Maximizing efficiency Standardize and improve its services through the need- based training Maximum utilisation of manpower Integrate its experts and training tools to manage growth Develop a cost-effective and user-friendly methodology for training and the use of technology Develop a professional expertise through Sharing best practices Increasing the opportunities to network on a regular basis Evaluating training systematically Developing a built in training process for human resourse development Morocco Richard Crayne Director of Operations S enior Exper t Dr. Mostaq Ahmmed Didier Krumm Dr. Phyllis SantaMaria William Prienté Mexico Training Centre Benin Didier.Djio Excusive Director Cossi Houeninvo Project Manager Training Centre China Sarah Tsien Head of Mission Pedro Valdes Head of Brazil Miguel Ringvald Head of Mission Togo Atafèinam KADANGA Head of Mission India Shivendra Sharma H d f Mi i PlaNet Finance Training and Technical Support

cost-effective and user-friendly methodology for training and the use of technology Develop a professional expertise through Sharing best practices Increasing the opportunities to network on a

6 Structure and Functions of PFTTS Structure and Functions of PFTTS-:Training & Technical Support PlaNet University Impact Knowledge Management (IKM) PlaNet Library PlaNet Technology On line courses Tutorial help Training centre support Registratio nfor Methodology for credit ratings Consultancy services Evaluation scheme for MFIs Success PFTTS Head Office Develops guidelines, training and support together with the Country, Training Tasks, Resources & Library and Technical Services & Consultancy On line articles and resource s about MF Tutorial help for finding resource On line resources for effective MF technology Tutorial help Country Training Tasks Needs Assessment Professional Training Training for Trainers Follow-up to Training Evaluation Accreditation of Training Distance Training Materials On Site Training

support together with the Country, Training Tasks, Resources & Library and Technical Services & Consultancy On line articles and resource s about MF Tutorial help for finding resource On line

7 Global Structure What are the Country Resources & Library Internet Documentation Video library Conferences & workshops Evaluation Online Resources On site R Country Technical Support Needs analysis Development of products Development of training and operational manuals Hands on training Evaluation Benefits of Effective Training? IMPROVED WORKING TECHNOLOGY TRANSFER LONG-TERM TRAINING AND BUSINESS RESULTS MF practitioners learn how to improve their working practices through exploring best practices in Micro Finance from around the world and case studies from their local i Training courses use a range of technologies such as the Internet, computing programs and the case study method, so trainees learn new technical skills and subject matter in an integrated approach Three-phased approach PAP can (Preparation, Active Group Work and Practice) ensures Solid retention of the training Improved job performance and A positive impact on business results

IMPROVED WORKING TECHNOLOGY TRANSFER LONG-TERM TRAINING AND BUSINESS RESULTS MF practitioners learn how to improve their working practices through exploring best practices in Micro Finance from

8 CONFIDENCE Cost-effectiveness and Sustainability Trainees and their trainers work together using clear, easy-to-use materials that have been developed by leading subject matter and training methodology experts and adapted to the local needs Time, money and resources are used to greatest benefit through the use of skilled and efficient manpower Human Resource Development & Institutional Sustainability Institutional planning should aim institutional sustainability - business plan provides the means to reach institutional sustainability An organization is institutionally sustainable when it is run smoothly, fulfills its mission and goal, and is financially self-sufficient Sustainable institutional development enables an organization to introduce effective products and mechanisms which in turn lead to profit earning and financial selfsufficiency Institutional sustainability can be achieved by enhancing 1.structural, 2.managerial, and 3.operational efficiencies Structural efficiencies : Decentralization and standardization of institutional structure Managerial efficiencies: Incentive systems, good communication between staff, clearly defined responsibilities Operational efficiencies: Effective MIS linked computer systems and uncomplicated processes, typified by product specialization and simplicity

Sustainability Institutional planning should aim institutional sustainability - business plan provides the means to reach institutional sustainability An organization is institutionally sustainable

5. SOCIAL PERFORMANCE MANAGEMENT IN MICROFINANCE 1

5. SOCIAL PERFORMANCE MANAGEMENT IN MICROFINANCE 1 INTRODUCTION TO SOCIAL PERFORMANCE MANAGEMENT Achieving Social and Financial Performance In the microfinance arena, performance has long been associated