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CHAPTER 6
Training and Capacity
Building
With the relaxation of constraints on the availability of on-lending and investment funds in
the last couple of years, human resource development has become perhaps the most important
challenge facing the sector. 1 There has been an increase in the number of and variety of
institutions offering training courses and other capacity building (CB) activities, and the
number and variety of courses themselves have multiplied, but the state of development of
the training and capacity building (TCB) sector is embryonic in relation to needs.
Like other support services for the sector (rating, consulting, auditing, research and statistical),
training and capacity building (TCB) institutions and organizations have developed organically
in response to perceived needs on the demand side, and in accordance with the particular
orientations and priorities of providers on the supply side. However effective TCB demand (as
expressed willingness to pay) has been weak, for a combination or reasons, including (i) the
understandable tendency "not to know what one doesn't know" (i.e. a lack of appreciation of
the crucial importance of training) and the consequent unwillingness on the part of promoters
and senior management to spend money on TCB, especially in the case of new NGO entrants to
the sector with existing social services activities, who need TCB in new financial skills the
most, (ii) genuine affordability issues, (iii) the tendency to regard training as a free good
and (iv) perceptions about the mixed quality of the offerings available, and the sense, no
doubt correct for some skills and types of training, that one can do a better job in-house,
through learning-by-doing. The growth of TCB has thus been in large part supply driven, with
donors and apexes such as NABARD, SIDBI, and FWWB financing much of it in the early years.
They are now increasingly being replaced by banks like ICICI, which has a comprehensive
vision and plan to grow the sector, with an important place in it for support services including
TCB.
Main TCB institution types
Over the years there has been a slow but steady increase in the number and variety of institutions
offering TCB. While it is not possible to survey the field here, a few words on the main types
of institutions and trainings offered follow.
Like other
support services
for the sector
(rating,
consulting,
auditing,
research and
statistical),
training and
capacity
building (TCB)
institutions and
organizations
have developed
organically in
response to
perceived needs
on the demand
side, and in
accordance with
the particular
orientations
and priorities of
providers on the
supply side.
However
effective TCB
demand (as
expressed
willingness to
pay) has been
weak
Most of the early entrants to the sector were the NGOs who pioneered the SHG model such as
MYRADA, PRADAN, and DHAN who were funded largely by NABARD, and donors, as the SBLP
grew. Some of them spun off training activities to separate wings which later evolved into
standalone institutions (e.g. the Tata-Dhan Academy) They were joined by a number of NGOs
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