> Posted by Peg Ross, Director, Human Capital Center of Grameen Foundation

Frontline staff, like these field officers in Varanasi, India, need support and guidance to make microfinance effective and meaningful to their clients.

Frontline staff, like these field officers in Varanasi, India, need support and guidance to make microfinance effective and meaningful to their clients.

Sitting at his desk in a small office in the far northeast of India, Anil describes why he does what he does: “When I see a client who started with two pigs and now has 50, I know I’m helping to make a difference in her life.” As a regional manager at a small microfinance institution (MFI) working in rural villages, he leads a team of five branch managers and 30 field officers.

Anil joined his MFI to help address the poverty he saw in his own community and because he needed a steady job. He stays because he sees the impact his work is having — and because he still needs a steady job. There are limited employment opportunities in his area and many young people are unemployed. His story is a typical one. He’s not out to make a fortune; he just wants to provide a comfortable life for his family and give the people he serves a chance at a better future.

The Indian microfinance sector is facing an unprecedented crisis and the reasons are many and complex.  Politicians, regulators, academics, and the visionary founders and leaders of the sector will continue to debate what went wrong and the best way to fix things. Meanwhile, people like Anil will still be in the field, working hard to help their poor clients escape the bounds of poverty.

One of the things Anil does especially well is translating the mission and vision of his organization for his team in the field. Beyond ensuring that growth and collection targets are met, he wants each one of them to develop the capability and confidence to use their strengths to advance the MFI’s social mission and sustainability objectives. But he’s got a lot on his plate, and thinking about how to support his team sometimes comes at the end of a long 14-hour day. Imagine how much more effectively he could support the professional development of his team members if he had easy-to-use, relevant tools to help him.

Grameen Foundation and Grameen Foundation India (GFI), with the support of funders who understand and value the contributions of people like Anil, are determined to help the sector regain its footing and reclaim its mission. Our perspective is simple — the people really making microfinance happen are those in the field, and they need support and guidance to work to the best of their abilities.

We recently announced our plans to work with socially-motivated MFIs who understand that a well-trained, committed staff is the key to strengthening their ability to serve the poor with appropriate financial and other services.   Starting with a review of their current human capital management practices, we will work together to identify and implement the changes that are needed to better support their social and financial objectives.  We will also develop and pilot a comprehensive leadership development program designed to address the current and future challenges mid-level field managers such as Anil face every day. Underscoring our commitment to the Indian microfinance sector, we will hire a program manager to be based at GFI’s office in Gurgaon to oversee our human capital management work in India.

Many of the changes won’t be difficult or expensive to implement. But, they will require the commitment and support of the senior leaders at each organization. They must take the lead in championing and communicating the organization’s mission, values, and strategic objectives, and must hold everyone accountable for supporting them. The great leaders in Indian microfinance are right now out in the field, listening to and talking with all stakeholders, especially their employees. They are getting a deeper understanding of the realities on the ground and making sure that everyone understands what their organization stands for and its commitment to meeting the needs of both clients and employees.

This is a critical juncture for India’s microfinance sector — and a “teachable moment” for the global microfinance community. We hope this renewed focus on these vital “people practices” will help move the Indian microfinance sector forward so that Anil and the thousands like him can continue to make a difference.

Peg Ross is director of Grameen Foundation’s Human Capital Center, helping anti-poverty focused financial institutions across the globe strengthen their people practices to achieve more sustainable growth and reach greater numbers of the world’s poorest people.