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money to support operational expenses of nascent partners, although at a much lower level than in the CASHE project. It will also provide livelihood development, microinsurance, and research services, and has received funding from ICICI and FWWB to incubate potential partners. 6 The courses include those which are (i) relatively broad and general introductions to the field or a specific topic and are primarily conceptual, (ii) seek to sensitize, motivate, and bring about attitudinal and behavioral change (iii) enhance managerial skills (iv) impart microfinancerelated specific skills Finally, Reach India, is an important recent initiative in SHG training for the East and Northeast, taken by Freedom from Hunger (FFH), USA, which seeks to strengthen the capacity of a large number of self-help promoting institutions (SHPIs), to provide CB services to SHGs, sustainably. Reach India will consist of a network of low-cost service centers, managed and supported by a Capacity Center in Kolkata. It is registered as a trust but has also applied for a S 25 company license. It has already identified six social entrepreneurs to operate the first field-based service centers in Orissa, Jharkhand and Bihar and has developed an orientation and training curriculum to equip them to operate effective "social franchises". A comprehensive needs assessment and mapping of SHPIs across the region undertaken by Reach identified more than 1,200 SHPIs working in the region: 301 in Orissa, 215 in West Bengal, 208 in Bihar, 205 in Jharkhand, 131 in Chattishgarh, and 142 in the northeast serving 30 lakh poor women and their families. These SHPIs are willing and able to pay for training in the provision of CB services. Reach India has also started a dialogue with organizations like NABARD, Ford Foundation, SDTT and others for partnership building to take this initiative forward. Apart from institutions geared primarily to microfinance training under the two models, several institutions offer training in the set of skills relevant to livelihoods generally (of which finance is just one component). The most recent of these is the Indian School of Livelihood Promotion set up in 2004 by Indian Grameen Services, which is part of the BASIX group, with funding from the Ford Foundation and the Sir Dorabjee Tata Trust. Programmes have been conducted in different parts of India and regional centres have been set up in Indore (for western and central India), Ranchi (for eastern India) and Bangalore (for the South). A Livelihood Promotion Resource Book is used extensively, and has been translated into Telegu by APMAS. ISLP works both through in-house and "extended" faculty who are practitioners close to the ground. Other institutions imparting the skills necessary for enterprise and livelihood development are the Entrepreneurial Development Institute, Ahmedabad, AFPRO which promotes mostly technical skills in agriculture, livestock, soil and water conservation, and BAIF (livestock). Along with institutions, the number and variety of courses themselves have multiplied. The training calendar put out by Sa-Dhan for its members in 2006 lists 65 courses, and this excludes courses offered by non-respondents, non-member institutions such as DHAN, and the public sector training institutions, as well as 10 courses proposed for which the dates have not been finalized. In addition it lists 58 courses offered by 5 institutions 7 which are "demand based" i.e. will be held if there are enough takers for them. The courses include those which are (i) relatively broad and general introductions to the field or a specific topic and are primarily conceptual, (ii) seek to sensitize, motivate, and bring about attitudinal and behavioral change (iii) enhance managerial skills (iv) impart microfinance-related specific skills. Offerings in relation to needs 104 Despite what at first sight appears to be an abundance of riches TCB offerings are a drop in the bucket in relation to the needs of the sector. 8 It is useful to look at needs in relation to
Training and Capacity Building the two major models, and to the four levels of governance, senior management, middle management, and field staff, within each of them. The MFI model With respect to the MFI model, many observers would agree with a professor of management with considerable experience of the sector who recently characterized Indian microfinance as having excellent field staff, but inadequate management, and "atrocious" governance. Taking the last of these first, while one can only admire the dynamism, talents and flair of the promoters of the some of the largest MFIs 9 the AP crisis brought to light a few unsustainable practices that good systems of governance would not have countenanced had they been in place. On the other hand, other MFIs, which are growing as rapidly, have always had a much better image for transparency, accountability, and client and employee satisfaction. Differences such as these arise not so much out of the lack of skills or capacities of the promoters, but have more to do with that intangible called "values" and the ethos promoters instill in their organizations. To that extent they are not amenable only to "training" in governance in a narrow sense. However, much greater awareness of good governance practices and structures is needed and this is one of the tasks of training. Governance improvement is also a major need in many small and medium NGO-MFIs which are often one-man shows. The next rung, of "managerial" and skills related training, for senior and middle management, is where standard classroom training followed by on-site mentoring can contribute the most to the healthy growth of the MFI model. On managerial training the management institutes would appear to have a distinct comparative advantage over specialized, microfinance-specific training institutions. This is because the relevant management principles in "visioning", strategic planning, and human resource development, and so on, are generic to a wide variety of financial and service industries. Examples of the kind of issues involved are doing something about the observation that only a handful of MFIs are "fun places" to work, or the COO can not take off for a month because of insufficient delegation, and so on. 10 However, while the managerial principles themselves are generic, faculty of management institutes are still in the process of equipping themselves with a greater understanding of the context in which they are to be applied, through action research, case-studies, consultancy assignments and familiarization with international experience. All of these are time-consuming, and a critical minimum number of faculty has yet to be developed in any of the institutions. The next rung, of "managerial" and skills related training, for senior and middle management, is where standard classroom training followed by onsite mentoring can contribute the most to the healthy growth of the MFI model While primarily managerial training can be supplemented with a modicum of skills training as the incubator experiment is doing by drawing on other faculty members who are specialists in banking, MIS, IT etc, and some management institutions such as IRMA do offer more skills training than the IIMs, it is more cost effective in most cases for skills training to be delivered by specialized microfinance-specific skills training institutes. 11 A couple of issues with skillsrelated training that is often raised by EDA and others are, first, the need for the CEO herself to be sensitized to the new skills her staff have acquired in classroom training so that they are encouraged to apply them on their return, and second, the need for not just one or two but a critical minimum of key individuals within the MFI to be trained so that they can back-stop and synergize each other's efforts. 12 Finally recent events serve as a reminder that MFI skillsrelated training is required also by the lenders, so as to better appraise MFIs and make good lending decisions. While microfinance has broader social and developmental objectives, the means is essentially 105
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Microfinance in India A State of th
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List of Tables Page No Table 2.1 Gr
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Preface and Acknowledgements This r
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Abbreviations ABC ADB BC BF CAR CAG
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CHAPTER 1 Overview and Summary of M
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Overview and Summary of Main Recomm
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1 1a 1b 2 2a 2b 2c 3 3a 3b 3c 4 4a
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The Light and Shades Study A major
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highest proportion of weak records
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their profitability after accountin
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allow the programme to grow organic
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1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8
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Endnotes 1 It is very hard to compa
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as cash with the groups, the true r
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linkages", 11 percent 3rd, and 5 pe
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References APMAS (AP Mahila Abhivru
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CHAPTER 3 Progress Under the MFI Mo
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Progress Under the MFI Model is fun
Page 55 and 56: Table 3.4 Comparative performance i
Page 57 and 58: Progress Under the MFI Model on lit
Page 59 and 60: Progress Under the MFI Model 4 Howe
Page 61: Progress Under the MFI Model Refere
Page 64 and 65: MFIs, and the need for MFIs to plou
Page 66 and 67: size had actually come down during
Page 68 and 69: The point at which peer group press
Page 70 and 71: The lack of contact and communicati
Page 72 and 73: Box 4.1 Continued 4. MFIs will coll
Page 74 and 75: Endnotes 1 There will be many disag
Page 76 and 77: 19 The base suicide rate in AP is 1
Page 78 and 79: References APMAS, 2005, "A Report o
Page 80 and 81: (such as cattle and houses), and co
Page 82 and 83: The advantage of the provider model
Page 84 and 85: Some lessons learnt from experience
Page 86 and 87: Box 5.2 VimoSEWA: Synergies between
Page 88 and 89: 86 Table 5.1 Main Feature of Health
Page 90 and 91: Endnotes 1 While the microinsurance
Page 92 and 93: 16 A little less than a fifth of th
Page 94 and 95: 29 The rationale for transfer progr
Page 96 and 97: Roth, James and Vijay Athreye, 2005
Page 98 and 99: Issues and priorities for action re
Page 100 and 101: Endnotes 1 See for instance CGAP (2
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Page 104 and 105: such as Chaitanya who soon became s
Page 108 and 109: finance, and the microfinancial ski
Page 110 and 111: Box 6.1 Continued in experts and to
Page 112 and 113: Endnotes 1 In a sense it always was
Page 114 and 115: 16 Examples are Margdarshak in Luck
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Page 118 and 119: Table 7:1 Commercial bank exposure
Page 120 and 121: The main constraints to the expansi
Page 122 and 123: further review, RBI has modified th
Page 124 and 125: 9 Thus ICICI has sold some of its b
Page 126 and 127: B. Equity Investments by the Ventur
Page 128 and 129: Figure : The Bellwether triangle Lo
Page 130 and 131: Despite the weaknesses the public s
Page 132 and 133: Box 7.1 Continued foreign sources o
Page 134 and 135: Endnotes 1 At this point they will
Page 136 and 137: References ACCION, 2003, "The Servi
Page 138 and 139: SIDBI Foundation for Micro Credit (
Page 140 and 141: categories, depending on the amount
Page 142 and 143: The distribution of total disbursem
Page 144 and 145: Endnotes 1 It should be noted that
Page 146 and 147: B. Donor Participation in Indian Mi
Page 148 and 149: this has dropped to 8% on the curre
Page 150 and 151: and poor populations. More directly
Page 152 and 153: and expansion of available retailer
Page 154 and 155: 11 SDC through various programs for
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154
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1.1 Impact evaluation of Spandana's
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in the loan tenure of 24 months. Th
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There are two main motivations of a
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compensation structures used by Ind
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Endnotes 1 By Annie Duflo, Anvesha
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29 The main components of direct tr
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