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Training and
Capacity Building
9 As Sitaram Rao says "these are unique people, not like you and me".
10 IIM Ahmedabad was proposing to hold an annual 5-day course for the "number twos" of MFIs in an
attempt to respond to the oft-observed problem that when the chief executive is out of town decisions
tend to get held up (a reflection perhaps as much of organizational culture as of competencies, which
got IIMA interested also in offering human resource related courses to do with staff incentives,
participation etc). IIM was also interested in getting into structure, design, and "world-view" related
issues (often loosely referred to as "Boulder-type" training). The courses could not be held for various
reasons, the most important being other priorities, but also because of the dearth of case materials.
SIDBI has sponsored case study preparation through faculty at IRMA and other institutions, and the Sir
Ratan Tata Trust Fund for Research Collaboration in Microfinance through IIMA, and several cases have
been prepared over the years, two of them being Pathak and Sriram (2004) and Sriram (2005).
However the dearth continues. SIDBI has also subsidized the fees for MFI leaders to attend IIMA's wellknown
three tier programme for top, senior, and middle management, designed for all industries, but
after the first year response from MFIs dropped off..
11 As Box 6.1 points out the incubator experiment recovers only 10 percent of the cost from
participating MFIs.
12 EDA has also noted the tendency for people too junior to apply the skill in question to be sent for
training, presumably on the basis of grant money, and for CEO and COOs to consider it "infra-dig" to
attend courses along with their subordinates (another cultural problem). A related issue is the failure
of senior personnel from the apexes to "get trained" themselves by attending courses. A recent
evaluation indicated that the type of participants who benefit the most are middle management, and
MFI leaders who have had at least a little experience. Working level staff tend not to benefit as much,
partly because they are concerned in their jobs only with one limited aspect of operations and
therefore lack the motivation to develop a broader understanding of inter-related aspects, and/or
have language problems in absorbing the training.
13 One solution would have been for EDA to have trained faculty in several public sector training institutions
where salary costs are lower, or which are aided by government, who would then in turn have trained
MFIs around the country. For various reasons this did not happen.
14 And that more of it will be offered in regional languages, with translation where appropriate of CGAP
and other modules. An issue that is becoming increasingly salient is the impact on institutions attempting
to recover their costs, of the large amount of grant money becoming available for the sector for
training (which in itself is a good thing). Incentives for quality control are much weaker when an
institution can depend on subsidies. A possible solution is use of the voucher system under which
institutions would cost their offerings at full cost, and the subsidy (a voucher) would go to those
seeking the training so that they can choose the best offerings from among eligible institutions.
15 The ACCION resident advisers will enjoy back-up support from specialists in the US. One such adviser has
already been posted to a UNITUS grantee, where he will have executive line responsibilities. ACCION also
expects to work with Lok Capital's partners. ACCION's emphasis is on urban microfinance, and on
downscaling, and would like to partner with commercial banks and finance companies on this. It
hopes also to promote the CAMEL rating methodology it has developed.
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