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Box 6.1 Continued in experts and to contextualise the management learning to the specific issues in microfinance. We are currently in the handholding phase and have made several visits to the Incubatees at their field sites. The inputs have been tailor made to suit individual MFIs and the resource persons include consultants. The handholding has included a training of trainers for field operations, organisational diagnostics for human resources development and MIS and IT. The Incubatees have sent various concept notes, business plans and draft agreements with lenders, so that IIMB can vet them and provide feedback and suggestions. The environment for microfinance in India has undergone significant change in 2006. The industry underwent a crisis in the state of Andhra Pradesh with opposition to the high Box 1: Modules in the Foundation Programme • Accounting and Finance • Banking and Finance • Human Resource Management • The Start-up Model • Governance • Visioning • Strategy • Rural Marketing • Data Analysis • Venture Capital Funding • Microfinance Workout Box 2: Content of the Microfinance Workout • Understanding MFIs as organisations • Scaling up of MFIs • Financial Analysis and Financial Planning in MFIs • Managing Partners • Valuation of an MFI/SHG • Economics of Microfinance • Legal issues and Transformation • MF for men, urban areas and agriculture • MF and Development • Operations and Field Force management • Crisis Management • Understanding Client Cashflows • Transformation issues for MFIs and the experience from India • International experience in MF • Insurance • Funding and Capacity Building • Learning Needs Assessments of Incubatees and Trainees • Tutorials in using spreadsheets (Excel) interest rates charged to clients, staff behaviour towards clients and ethical practices of some MFIs; some of the issues relate to the high growth rates experienced by these agencies. The political economy that governs microfinance practice in India is complex. The challenge for the Microfinance Group has been to design our programme and advisory to enable the Incubatees to appreciate this environment, and develop strategies to function clearly within the law and pursue growth strategies that truly reflect the ability of the organisation and its finances rather than supply side pressures. Future plans of the Incubator include taking incubatee organisations on field visits to other mature MFIs, developing some cases and case studies on their experiences, support for IT and MIS development and learning from the first cycle of the programme. Our learning from this cycle of incubation should let us know if we could attempt another cycle of incubation with a new set of organisations. From "A Note on the IIMB Microfinance Incubator", IIM, Bangalore 108
Training and Capacity Building Box 6.2 Some key findings and recommendations from "Catalysing Capacity Development: Assessing the Need for Training" 20 …Selecting Training Courses The large-scale and diversity of courses required by the MFIs will necessitate the development of a system to assist MFI to diagnose their key issues and thus to assess and prioritise their needs. Using participatory methods to identify training needs will increase buy-in and understanding of the role that capacity building can play in the overall development of the organisation. This should reduce the number of participants sent to courses as a reward, and increase the expectations of the MFI for those trained to apply the skills they have learned. In addition, it will be important to look at methods for sequencing the courses - so that MFIs first take and implement the more basic courses that necessarily underpin subsequent (more sophisticated) ones. This will also relate closely to the state of evolution of the MFIs seeking the courses. …Use Classroom plus On-Site Follow-up Technical Assistance The study highlighted the need for post-training assistance to implement what has been learnt in the classroom. Worldwide there has been a move toward training that combines classroom-based learning with on-site, follow-up technical assistance, under which the participants work with the trainers/consultants to implement and institutionalise the training/ changes within their MFIs. Thus, for example, after three days working on portfolio management (ideally using their own data), participants return to their MFIs with a trainer or a consultant to work on institutionalising portfolio management systems and skills within their MFI. This approach is much more resource and labour intensive, and requires a special quality of trainer (one that can put the classroom theory into practice in a variety of institutions). However, this approach has been demonstrated to lead to far more effective change and improvement within MFIs participating in the training programmes. The approach also means that the use of training courses as a reward system for staff members will probably be reduced since the MFIs will know that the participants will be expected to work with the trainers/ consultants to implement the training. This approach also offers a better business model for trainers/consultants in that the revenue stream generated is for 3 days training, plus 5-8 follow-up, on-site assignments of a week or more - rather than simply a 3 day classroom based training. …Develop Comprehensive, Easy-To-Use Training Packages Given the huge market in India, it will be essential to engage and empower as many trainers as possible to use the courses in an Integrated Curriculum for Microfinance in India setup. Several training institutions and independent consultants expressed the need for training materials they could adapt and offer to the industry. Some of the expanding and mature MFIs expressed the desire to conduct some of the training "in-house" tailored for their specific institutional systems and needs. It will be important to develop and disseminate training materials that can be adapted and translated for local needs and delivery through as many channels as possible. Exerpted from Wright et al (2005) Microsave Briefing Note No 46 109
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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
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Table 3.4 Comparative performance i
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Progress Under the MFI Model on lit
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Page 66 and 67: size had actually come down during
Page 68 and 69: The point at which peer group press
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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
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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
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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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