Microfinance Training Tips
Microfinance Gateway Staff
Insights from MicroSave, Boulder and CGAP
We heard you! Many Microfinance Gateway users have asked for more training resources. In addition to providing a new Training section on the site, Gateway staff asked key microfinance training providers for their perspectives and advice on developing microfinance skills, changes in the industry’s training needs, and moving beyond training to overall capacity-building.
Graham Wright helped design and establish the MicroSave program and is currently Program Director focusing on Asia. He pioneered the market-led approach used by MicroSave – in particular the Market Research for Microfinance tools.
Alexia Latortue is CGAP’s Deputy Executive Director and has trained hundreds of donors and investors in the CGAP Course for Microfinance Funders.
Bob Christen, Director of Financial Services for the Poor at the Bill & Melinda Gates Foundation, founded the Boulder Microfinance Training Program in 1995. He continues to teach, develop programming, and serve on its Board of Directors.
How did you get into microfinance? How have you developed your skills over the course of your career?
Graham: I am a reformed chartered accountant. I left the accounting firm Arthur Andersen (in the days we did photo-copying not shredding) with a rucksack on my back looking to do volunteer work in Bangladesh. I landed at BURO-Bangladesh, where we worked to rebuild what was then a bankrupt organization with no real internal processes, systems or controls. Today BURO is one of the leading MFIs in Bangladesh.
I have developed my skills through a fortunate mix of:
Learning by doing
Working closely with some of the best in the industry – Stuart Rutherford is still my "guru"
Sitting with clients under mango trees across Asia and Africa listening and learning how they manage their meager resources and the financial services they need
Acting as a sponge at training sessions, conferences, and workshops
Asking endless naïve questions during visits to hundreds of MFIs
Frantic reading to flesh-out and support all of the above
Alexia: I was studying development economics and international relations when I became intrigued by microfinance through articles describing its premise and successes. I was attracted to this approach combining deep poverty work with strong private sector principles. During a graduate school internship, I co-organized a major conference on international development. Through this opportunity, I worked with the heads of leading microfinance organizations (CGAP, Women’s World Banking) and started developing my skills with the help of these fabulous mentors. Later I joined a microfinance project in Haiti, and learned from colleagues, clients, and entrepreneurs.
Bob: I got into microfinance after doing Peace Corps from 1979-81 in Chile. While working with agricultural cooperatives, I realized people owned land and knew how to cultivate crops and raise animals, but were losing their land due to difficulties managing finances. I came to understand the central role that finance plays in development. I then studied at the Agro-Economics Department at Ohio State University, where I got my Master’s degree and did research on savings and credit for small farmers who were members of credit unions in Honduras.
How have training needs changed in the microfinance industry over the past decade? How have your organization's training products evolved to meet these needs?
Graham: The needs of the industry have evolved enormously over the last decade. MicroSave has recently developed toolkits on Advanced HR, Risk Management, and Advanced Accounting to keep up with the higher level of technical assistance needed to manage the growth and complexity in operations.
No training toolkit is ever complete – they require constant updating to reflect changing times. Recently, we updated our 37 toolkits/ training courses to reflect the emergence of social performance management and alternative channels such as e-/m-banking.
Training delivery styles have also changed significantly (See Text Box).
Alexia: The demand for training on a range of issues has exploded, both with regard to technical content (savings, risk management, remittances, management information systems, governance, etc.) and “behavior” content (leadership, management, etc.). There is no longer any single microfinance training suitable for a broad range of people. Delivering smart human resource management strategies is one of the greatest challenges facing retail institutions.
CGAP’s approach to training has clearly changed in working with donors and investors. Before, we were quite credit-focused and concentrated mostly on appraising retail institutions. Now we assess the whole financial system – retail, market infrastructure, and policy. Participants ask questions ranging from how to do equity valuations to the options for developing weather based index insurance.
Bob: While the core concepts and methodology surrounding general lending practices has not changed dramatically, the sector at large has evolved from purely donor-fueled NGOs to regulated financial entities able to capture deposits, borrow from capital markets, and expand.
Boulder MFT’s core programming stresses the fundamental methodology and proven techniques that lie at the heart of microfinance. At the same time we recognize the importance of complementary programming in health-care, education, human rights, and civil participation. Each year, our training programs focus on the most pertinent events affecting the sector. Last year, the Spanish Boulder MFT in Costa Rica featured content geared at confronting and dealing with the effects of the financial crisis.
Training is only one aspect of an individual’s or institution’s capacity-building. What are other important methods of professional development?
Graham: Mentoring and coaching within an organization is tremendously important, as is providing the opportunity to learn from peers outside the organization – through conferences or exchange visits.
For technical skills however, training is often the only really effective way of developing staff who can then bring effective change to organizations. MicroSave is focused on training to drive change within organizations – not as an activity in of itself or as a reward. We focus on transferring the knowledge, skills and attitudes necessary for effective use of each MicroSave toolkit through hands-on, practical application of the tools as part of the training process.
Alexia:Training is just one piece of the puzzle. Mentoring, on-the–job coaching, stretch assignments, exposure visits, and rotations in different organizations all are very useful. Some funding agencies send staff to work in MFIs for a period of time or offer secondments with another funding agency with complementary strengths. Institution-building is a continuum, not one event or experience.
Some individuals are great at identifying and getting funding for trainings, jumping from one class to another. But without some thought about how it will be incorporated into daily work, the full return on investment is not reaped by the institution at all. Despite innovations within some funding agencies, CGAP’s SmartAid for Microfinance Index demonstrates that too few funders think strategically about training and capacity-building
Bob: The key is to get grounded in the work through hands-on experience with microfinance programs in the field. One should also take advantage of the multiple dimensions of a training experience. Just as valuable as the Boulder MFT courses are the interpersonal relationships formed during training programs that in turn transform themselves into an alumni/support/learning network for life.
What would your top piece of advice be to people entering the field of microfinance?
Graham: Look for trainers who have practical experience and a proven track record of implementing the topic on which they are training.
Alexia: Go spend time in the markets you are trying to help develop. Whatever you want to do in microfinance, understanding the clients and their economic, financial, social and political realities is key. I often say that it is much harder to be a microfinance banker and a traditional commercial banker—increasingly you need similar sets of technical skills, plus all the other things that make a difference to financial inclusion.
Bob: Get past the hype and down to the deeper analysis of the core set of issues affecting access to financial services. It is a field that is full of nuance and great promise in ways that are far richer than how it is usually presented in the media or in fundraising events.
This is a great article. I am an accountant as well as running a finance, tax and training consultancy. I want to make a difference in our community and have started training microfinance groups on entrepreneurship, basic accounting skills and on personal finance planning of these members.
i am handicapped by resources to provide my services. It takes an average of US200 to travel to such locations in the rural settings and hire a seminar room together with my accommodation. We seek funding for this good cause and do not know where to start. We also seek guidance on training material preparation although we tailor them to the needs of each group. Any word of advice on these issues?
Eddie Wokabi Turner and Henrshaw Kenya
05 May 2010
Microfinance is the best tools for poverty reduction
It is already proven that microfinance services for the poor is the best tool against poverty. By providing microcredit with social mobilisation like education, health, sanitation, drinking water, microredit is the major tool to reduce poverty.
Balaram Paudel Small Farmer Development Bank Ltd. Nepal
09 Feb 2010
Ensuring quality of Local Training
Hello All
YES. Ensuring 'quality of training' is for me the most important issue. There are many who claim to be 'trainers', 'consultants', etc. But they can't deliver. Microfinance should essentially be a 'practitioners-led'. It is a relatively new-science, as development fields become focussed on poverty, participatory methods, and 'New Economics'. Good materials are rare!! You can find good materials on standard economics, biology, chemistry, etc -- but not on (rural) microfinance! I remember a discussion on the dev-finance listserve (Ohio-state Univ.) a couple of yeras ago about the best reading materials on microfinance. Most of us mentioned 'The Poor and their Money', and little else. So likewise people who can deliver quality training are essentially rare. There need to be quality check on the training.... I personnally recommend those training by MicroSave, and most recently(?) the ILO's 'MAKING MICROFINANCE WORK'. ILO is expanding its good work in many areas including here in Ethiopia.
Getaneh Gobezie
Getaneh Gobezie Independent Consultant Ethiopia
03 Feb 2010
Too much Theory and Too Little Relevance
The problem with Micro Finance is not that trainers and training material is not available. The situation is the contrary. There is a plethora or trainers and training programmes available.
The most remarkable thing about many of these trainers is that they have never worked in a Bank or a Micro Finance Organisation. Their inputs are purely bookish and theoretical. At least Micro Finance has provided livelihood to scores of arm chair theoreticians and trainers. This is a not a mean achievement.
Ghana
03 Feb 2010
No magic in microfinance
Interesting revelations on how to get microfinance going. The concept itself does not promise any magical solution as it is sometimes trumpeted around. Microfinance can continue to make a head way in reducing poverty when the challenges of the particular country or region and clients are put into perspective when designing the products and services for the productive poor . MFIs can learn from each other but it’s important for each MFI to know the environment in which they are operating.MFIs should desist from the "one fit all product design approach".
Roderick Ayeh ARB Apex Bank Ghana
03 Feb 2010
Local Training
If you are looking for quality local trainers in microfinance, I suggest you have a look at the Making Microfinance Work website of the ILO's international training centre in Turin mmw.itcilo.org. Building on the great tools and resources developed by CGAP, MicroSave and others, we developed a training curriculum to build the capacity of microfinance middle managers designed to be delivered by certified local trainers. The website includes a list of more than 30 trainers who have already been certified, with a range of language skills. The materials have been translated into Arabic, Russian, French, Spanish, Portuguese and Vietnamese among others.
Craig Churchill ILO Switzerland
21 Jan 2010
Understanding Microfinance
Interesting to know the stories of these professionals. As Graham stated very clearly, it is always learning by doing and there is no short-cut to understand microfinance. It is related with life of the poor people. The top piece of advice at the end is worth taking..just excellent.
I agree with the fact that training is important but not the sufficient condition for an institution to develop and to be sustainable. It needs a continuation and with updated skills and knowledge. As training, even on one topic, can not be "one-for-all" method based, it has to be analyzed and developed as per the requirement of the people and organization.
The best way of learning microfinance is doing practical microfinance in field.
Anand Srivastava Frankfurt School of Finance & Management Germany
20 Jan 2010
Director
Good microfinance trainers should have high levemulti-disciplinary skills in adult learning, finance (broader than just microfinance), poverty economics, world and national development trends and the downer details of sound practice microfinance operations. They should also have excellent, up-to-date knowledge of MF industry trends and issues. There are many trainers out in the field who need these - because one cannot give away what they do not have.
Andrew Obara FRIENDS Consult Ltd Uganda
06 Jan 2010
What would your top piece of advice be to people entering the field of microfinance?
One needs to have first and foremost the skill in training adults, secondly the relevant dose of experience in the field of training (preferably attained through practical work), third the ability to assist the trainees to translate the concepts into their everyday management and interpersonal relations. I am referring here particularly to training owners of rural MFIs and the local managers they will normally recruit with limited skills in financial management.
oluka peter olpe konsult Uganda
29 Dec 2009
Training -quality of Local Training
I am agree with most of the comments. most importantly we should provide upto date comprehensive training to all sectors of the MFI and monitor their output well so that whatever they have learned should pass on to their stakeholders.
Biggest challenges the trainer has it is to do pre training study on the MFI and their stake holders as well as environment of the area. In depth study will help the trainer to understand the what subjects and topics that need to address.
Most trainers are come unprepared but delivered stereo type subjects/titles which not relevant to their needs but in general. This has become a common issue to the participants at the workshop.
Trainer should and must up-to-date the participants back grounds and well inform about their capacity. Address what is more workable and practical issues that the participants will, were and was face in the industry.
Training process should be more Participatory style, look out for common but always overlook issues, Fund management, topics like product development and market process, look out for furhter loan procedures etc.
Sri Lanka
21 Dec 2009
Ensuring quality of Local Training
For training to be effective in strengthening Microfinance as a tool to help so far unbanked people (especially poor and rural people, as well as other vulnerable individuals, groups and businesses) it needs to be integrated in a country's financial sector on the one hand, and in the social sector as regards sociopolitical lending, with firewalls and bridges between them. That is a complex work adapted to specifically local processes. Consequently also the training to the MF services providers, their owners, management and staff, as well as to their clients and to their regulators needs to be adapted to local situations and processes. This for me explains the importance for quality assurance of training and trainers. There are certification conditions for bankers, accountants and most other professionals and Microfinance is more complex than those jobs. This would then also be a tool for weeding out waste in donor and NGO activities that does hinder, frustrate rather than develop MF. Regards, Peter
Equity Valuation Toolkit
This toolkit gives MFI managers the theoretical understanding and practical examples to conduct an equity valuation of their institutions.
MicroSave Toolkit: Loan Portfolio Audit
This toolkit is designed to guide practitioners through an assessment of the risks and inadequacies inherent in an MFI’s portfolio.
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