Initiative Will Provide Model for Global Microfinance Industry
Grameen Foundation today announced it is increasing efforts to improve human capital management strategies at socially-focused microfinance institutions (MFIs) in India. The push, which comes as the Indian sector is slowly rebuilding after recent upheaval, will be supported through funding from Citi Foundation, The McGraw-Hill Companies and The Capital Group totaling $550,000.
Strategic Human Capital Practices
Last year’s unrest in Andhra Pradesh highlighted the need for MFIs to pay closer attention to their institutional strength and retool their “people practices”. This was underscored by the findings of the globally-focused 2011 Microfinance Banana Skins report which identified reputational risk, corporate governance, management quality, staffing and mission drift as being key concerns among practitioners and other key industry stakeholders.
“The microfinance industry is at a critical juncture in its development and this moment provides an important opportunity to reexamine practices especially in areas such as human capital management that make up a major cost center for the sector, and could translate into greater impact on poverty and better overall performance,” said Alex Counts, president and CEO of Grameen Foundation.
“India is one of the bellwethers of the industry and we believe our work there will demonstrate how microfinance institutions can create more value for the poor at lower cost by upgrading human capital management strategies.”
Grameen Foundation India Private Limited (GFI), a wholly-owned subsidiary of Grameen Foundation, will spearhead the work in India. Leadership support from Citi will focus on increasing employee commitment and effectiveness, especially in the context of client protection — a critical issue for Indian MFIs facing the pressures of explosive growth, heightened competition and increasing commercialization.
Additional funding from The McGraw-Hill Companies and The Capital Group Companies will focus on leadership development for MFI mid-level managers who are often tasked with leading scores of field officers with little or no management training. Leadership development at this middle management level is also vital for the future governance of MFIs.