Sanchetna Microfinance Newsletter July 2009


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Newsletter of Sanchetna Financial Services

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Sanchetna Microfinance Newsletter July 2009

  1. 1. V O L U M E 1 , I S S U E V I I 1 J U L Y , 2 0 0 9
  2. 2. PAGE 2 Sanchetna ventures into Individual Lending The team of Sanchetna has ventured into individual lending on a pilot basis. A few villages on the periphery of Gomtinagar area in Lucknow have been chosen as the operational area for the pilot project which will look at giving loans a select few small entrepreneurs in the next three months. A pre – pilot study was conducted for two months and a careful study of the cash flow analysis is con- ducted in order to mitigate the risk. Also the clients are asked to furnish their documents along with PDC’s. The average ticket size of the loans is between 15-25 thousand rupees. The clients selected will be mostly males who are already into their business for a substantial period of time. Training on Internal Audit and Controls The Internal Audit Manager from Sanchetna attended the three day training programme conducted by MicroSave in Lucknow. The training was held between 23-25th of June with participants from over 25 organizations across the country. The training covered areas such as Risk Management, Preventive Control Measures and the Role of Internal Audit. VOLUME 1, ISSUE VII 1 JULY, 2009 SANCHETNAINDIA.COM
  3. 3. Ways to Raise Productivity of Field Officers PAGE 3 Apart from financial inclusion, employment generation has been another noteworthy achievement of the MFI sector. Industry big wigs such as SKS, Share and Spandana have collectively employed nearly 50,000 human resources majority of them are field officers. Credit should be given to these companies and also to other smaller MFI’s which are giving employment to so many youngsters, especially in the rural areas. Most of these field officers are either high school drop outs or graduates, who if not employed here would otherwise find it difficult to find work else where. Since a majority of them happen to be from the villages, it is easier for them to work in the field which also happens to be in the semi-urban and rural areas in most cases. Given the financial condition of these young- sters, many of them are also the sole bread earners in their families. This is indeed a great opportunity and also a risky at times since they deal with cash on a daily basis, the chances of fraudulent activities are high. Having said that the industry as a whole needs to focus on the well being of our most crucial assets, which is our human resources. Apart from paying them well, we could look at few other things, which are already prevalent in some places but needs to be replicated across the industry if Microfinance is become the next big thing in Indian industry. If the current growth pattern continues, the industry may require close to a million Field officers in the next ten years. The difficult part is not where to source these million field officers as India is a young nation and there will not be any shortage of manpower. The problem will arise when once the sector is fully stabilized and once the companies grow to certain level where standardization becomes the key word. Here I think the industry will have to look at opening training institutes where youngsters could be specially trained for Microfinance. The big players such as Bandhan and Share have already tried to address the problem and have opened up special in house training departments having an entire training campus / building where the new joiners undergo their training. Intellecash has opened a training institute in Jaipur, where they plan to train youngsters to become field officers and then place them in various companies. Based on my experience, another commonality found amongst the candidates applying for jobs in this sec- tor is that most of them are pursuing some or the other degree course. At times this leads to a conflict of interests and if the person joins the company, he discontinues his studies. The companies could use this as a selling point and encourage the youngsters to continue with their courses (only if they are distant learning courses) and provide them with leaves during the exam days. This way the field officer’s employability in- creases and he becomes more secure than before. One of the common practices in many MFIs is the pitiable working conditions provided to the field offi- cers. They slug out in the harshest of weather conditions all round the year giving good amount of business to their respective companies. The point I am trying here to make is what can we as companies do so to keep the field officer motivated day after to go out on the field with some kind of purpose and fulfill the company’s mission. Now a days most of the companies are providing motorbikes to their field staff. Even providing of facilities such as clean water dispensers in the branch offices or installing air coolers could also help energize the field officers. The field officers should also be asked to take their annual leaves to recharge themselves. The companies can also look at having some recreational activities during the com- pany town hall meetings where the management can recognize the high performers and also motivate the employees by sharing the company’s vision and growth plans. The top management, if frequently touches base with its employees, there is bound to be boost in the morale of the workers. VOLUME 1, ISSUE VII 1 JULY, 2009 SANCHETNAINDIA.COM
  4. 4. PAGE 4 When asked about the low salary levels one of the common reasons given by companies is to keep a check on the operating costs. All this is fine till one realizes the disproportionate salaries being drawn by the top management. How do they justify this is I am yet to figure out. Not only do the owners draw high salaries, they also have their kith and kin on the boards and claim various charges such as director fees, etc. This is something that is very common on NGO’s and Section 25 companies where even the grants given for the staff welfare activities is being siphoned off without a trace. Quite a lot of companies though are giving performance bonuses but still do not realize the benefits which they intend to get out of these incentive pay outs. One of the reasons for this is the components that the field officers are being rewarded for. One thing we need to realize is that the incentive structure should be simple and easily understood by the field officers. If that is not the case then the entire purpose of giving the bonuses is lost. The field officers should know what kind of work will give them maximum incentive. The incentives should also be given immediately which can either be monthly or at the maximum quarterly. Rewarding somebody in December for the groups made in June may not really motivate a field officer. Despite the financial crisis over the last one year, Microfinance has stood its ground and has more or less held its ground. Now when the worse seems to be behind us, can we ignore our Human Resources and en- ter the second stage of our evolution. VOLUME 1, ISSUE VII 1 JULY, 2009 SANCHETNAINDIA.COM