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TRANSCRIPT
Making Microfinance
Work
This document has been produced with
the financial assistance of the EU.
The views expressed herein can in no way
be taken to reflect the official opinion
of the European Union
Making Microfinance Work (MMW)
“Today, there is a growing recognition that not all poor people are necessarily entrepreneurs, but all poor people do need and use a variety of financial services. The challenge is to understand and meet this demand among increasingly poor and remote populations.”
Access for All (2008) The International Labour Organization (ILO) invests
in microfinance, and in the capacity building of
MFI managers in particular, because it believes that
microfinance can help realize its vision of decent work
for all. Microcredit and micro-leasing products provide
opportunities for small investments in self-employment
and job creation. Emergency loans, savings and
microinsurance provide the means for poor people to
better cope with risk. When microfinance is delivered
through group-based models, it can provide opportunities
for the poor to organize and have a voice. Some MFIs,
particularly those that partner with other public or
private actors in pursuit of a social mission, are actively
discouraging child and bonded labour, and helping
microentrepreneurs to grow and formalize.
As the focal point for microfinance within the ILO, the
Social Finance Programme initiated the development of
the Making Microfinance Work training series in 2003,
building on another area of ILO expertise and
concern-management. The ILO has a long history of
involvement in strengthening management practices as
a strategy for improving labour relations and working
conditions.
Its International Training Centre (ITCILO) in Turin, Italy
has been developing and delivering management training
curricula for more than four decades. The International
Training Centre of the International Labour Organization
(ITCILO) brought this experience to bear when it joined
forces with the Social Finance Programme to develop the
Making Microfinance Work management training program.
The MMW capacity building and training program is based
on two publications:
• Making Microfinance Work: Managing for Improved
Performance
• Making Microfinance Work: Managing Product
Diversification
The publications and training curricula draw from
experiences and techniques of microfinance service
providers worldwide. The training activities are delivered
locally by ITC ILO certified trainers and are supplemented
by additional exercises, tools and case studies adapted to
the local context.
THE MMW CERTIFICATION PROCESS
Making Microfinance Work (MMW) is designed to be
delivered locally by accredited ITC ILO trainers who are
capable of adapting the course materials to their local
environment. The ITC ILO has developed a three-phase
certification process that builds on the pool of resource
people available to retail microfinance institutions in a
particular region or country and aims to develop a cadre
of ITC ILO-accredited trainers who can deliver the MMW
curriculum with quality over time. The process has been
implemented in over 20 countries in Latin America, the
Middle East, Africa and Asia since 2004. The three
phases of the certification process are briefly summarized
below.
Phase I: A minimum of five and a maximum of twelve
local trainer candidates are selected to participate in the
certification process on the basis of their microfinance,
management and training experience, as well as their
capacity to offer the course on an ongoing basis if
certified. The selected trainers attend a demonstration
delivery of the full two-week course, which is facilitated
by at least one ITC ILO Master Trainer. They attend
the course as participants, together with 15-20 MFI
managers, so that they can absorb the materials and
delivery methodology through “live” experience. At the
end of each day, they meet with the ITC ILO Master
Trainer to review the day’s events from a trainer’s
perspective, discuss core adult learning principles,
and practice implementing those principles in brief
presentations receiving feedback from their peers.
Approximately one month after the Phase I event,
trainer candidates are given a content exam. The results
of this exam and the Master Trainer’s assessment of
each candidate’s performance during the Phase I event
determine which trainers move to the next phase.
Phase II: Up to eight trainer candidates participate in a
5 or 6-day training-of-trainers workshop with an
ITC ILO Master Trainer to understand the course design
and practice applying its methodology in role play
sessions using materials that they have adapted for their
local environment. Skill clinics focus on strengthening
training techniques that were identified as weak during
the training needs assessment conducted during Phase
I. At the end of this workshop, the strongest trainers are
invited to participate in the third and final phase of the
certification process.
Phase III: Up to six trainer candidates deliver the
complete two-week training to a real audience of 20-25
MFI managers. An ITC ILO Master Trainer is present to
support the trainers, provide feedback at the end of each
training day, and monitor the quality of delivery against ITC
ILO certification standards. Trainers who meet the ITC
ILO’s twelve certification criteria during this delivery are
accredited and will be able to offer the course on behalf
of the ITC ILO in the future.
Accredited Trainers have access to a complete set of
participant and trainer materials for the course, which are
regularly updated and distributed via the course website.
To maintain their Accredited Trainer status, they must
deliver the course at least once per year and make at least
one contribution to the ongoing development of course
materials.
OBJECTIVES
Making Microfinance Work (MMW)
Making Microfinance Work; Managing for Improved Performance
INTENDED AUDIENCE
This course is intended to help microfinance
managers, new and old, to better understand their jobs
and to obtain additional resources for strengthening
the performance of their unit, branch or institution. It
is designed for any of the following staff involved in
microfinance operations:
• Senior managers
• Department managers
• Internal auditors
• Regional managers
• Branch managers
• “Managers-in-training”
OBJECTIVES
• To broaden understanding of the various functions
that contribute to successful MFI performance.
• To supply a portfolio of tools that can assist managers
to strengthen the performance of their unit, branch or
institution.
• To stimulate the sharing of experiences and strategies
for meeting current challenges.
• To expose managers to microfinance experiences from
other parts of the world and inspire more innovative
thinking about what might be possible the local
environment.
the client. MFIs will not be
OVERVIEW OF THE COURSE CURRICULUM
This book contains 24 modules organized into five
parts:
I. Introduction to Microfinance Management.
The first section covers four topics that essentially
address different aspects of the course title,
Making Microfinance Work: Managing for
Improved Performance. Module 1 describes the
manager’s mandate, including the four functions
of management, different management styles
and the characteristics of effective managers.
Module 2 tackles the microfinance thread, briefly
introducing the range of financial services that are
relevant to the low-income market. The rest of the
section sets the stage and context for improving
performance. Module 3 considers the formal,
semi-formal and informal institutional options
through which microfinance can be delivered. It
highlights that managers can choose to transition
from one institutional type to another, or partner
with other types to accomplish goals and overcome
environmental challenges. Module 4 considers the
MFI’s strategic direction, including the critical
issues of vision, mission, values and objectives that
collectively define the performance that managers
should seek to achieve.
II. Markets and marketing. With the second set of
modules, the course begins to introduce tools
and strategies that managers can use to improve
performance. Microfinance begins and ends with
able to meet their goals without understanding
their target market (Module 5), and developing
and delivering products to meet the market’s
needs (Module 6). Module 7 helps managers
communicate the value embodied in their products
and services. To further promote a customer
orientation, Module 8 offers practical guidance for
providing outstanding customer service and Module
9 guides course participants to the ultimate
objective: customer loyalty.
III. Managing risks. While delivering valuable products
that stimulate loyalty, managers need to ensure
that they are enduring a tolerable level of risk.
Module 10 introduces a risk framework to
holistically evaluate the risks to which MFIs might
be vulnerable, as well as a system for managing
those risks. Module 11 discusses strategies to
prevent delinquency from occurring and, if it does
occur, to rectify the situation. Using a similar
prevention and detection approach, Module 12
provides guidance on managing staff fraud and
security risks. Module 13, the last in this section,
introduces strategies for managing external risks
that an MFI cannot control, but for which it needs
to prepare.
IV. Organizational architecture. A microfinance
institution needs to be built in the same way an
architect designs and constructs a building. It
needs a plan for organizing and supporting the
people who work to achieve its vision, mission
and objectives. This course uses the metaphor of
an organization’s architecture to describe three
issues that should be addressed collectively when
striving to improve performance: how to enhance
human resource management (Module 14); how
to proactively shape the institutional culture
(Module 15); and how to design an effective
organizational structure (Module 16). Tying these
three topics together, Module 17 explores the use
of organizational architecture to manage growth.
V. Towards greater efficiency and productivity.
The last section of the course introduces various
strategies for enhancing efficiency and productivity
in an effort to minimize the trade-offs that MFIs
invariably face as they try to provide valuable
financial services over the long-term. After
introducing the concepts and measurements
of efficiency and productivity (Module 18),
this section examines performance incentives
(Module 19), new technologies (Module 20),
TIMETABLE – FIRST WEEK
Monday
Tuesday
Wednesday
Thursday
Friday
Opening Session
3. Institutional
Options
4. Strategic Direction
II. Markets and
Marketing
5. Market Research
6. Production
Development
7. Communicating
Value
8. Customer Service
9. Customer Loyalty
III. Managing Risks
10. Introduction to
Risk Management
11. Credit Risk
12. Fraud and Security
Risk
13. External Risks
I. Introduction to MF management
1. The Manager’s Mandate
2. Financial Services and the Poor
HOMEWORK
TIMETABLE – SECOND WEEK
Monday
Tuesday
Wednesday
Thursday
Friday
III. Organizational Architecture
14. Human Resource Management
15. Institutional
Culture
16. Organizational
Structure
17. Using
Organisational
Architecture to
Manage Growth
IV. Toward Greater
Efficiency and
Productivity
18. Understanding
Efficiency and
Productivity
19. Performance
Incentives
20. New Technologies
21. Managing Change
22. Costing and
Pricing
23. Plans,
Budget and Reports
24. Managing
Performance
HOMEWORK
change management (Module 21), costing and
pricing (Module 22), and plans, budgets and
reports (Module 23) as strategies for improving
performance. Module 24 revisits the manager’s
mandate presented in the first module, considers
the challenges that managers might experience
as they endeavour to fulfil that mandate, and
summarizes the tools presented in the course that
can help them to overcome those challenges.
DELIVERY
This two-week intensive management training course
is designed to be delivered locally by accredited
trainers who adapt its materials to their environment.
Using adult learning principles, it relies on activities,
exercises and case studies to help participants apply
the concepts that they are learning. The course’s
Action Plan approach focuses on identifying practical
steps that managers can implement when they return
to their organization to improve performance.
The course can be delivered with the following formats:
• Standard 2 week/10 day course
• 2 weeks over a period of 3-6 months
• Executive (weekend) courses (5-24 weeks)
• Content specific course (2-3 days)
– Strategic track
– Client-focused track
– Human Resource Management track
– Financial Management track
– Risk Management tack
Making Microfinance Work (MMW)
Making Microfinance Work; Managing product diversification
INTENDED AUDIENCE:
The Making Microfinance Work: Managing Product
Diversification training curriculum is designed for
middle and senior managers in microfinance
institutions. It is relevant for institutions that have
already diversified and are looking for ways to
manage their diversification more effectively, as well
as institutions that have not yet diversified and are
looking for guidance on where and how to begin. This
course is also useful to funding agencies and technical
assistance providers that are trying to support MFI
diversification efforts.
OBJECTIVES
• To raise awareness of the opportunities and risks
that product diversification presents.
• To explore options for improving MFI outreach
through product diversification.
• To provide tools and strategies for managing
product diversification successfully.
• To encourage a more proactive management of MFI
product portfolios over time.
OVERVIEW OF THE COURSE CURRICULUM
This course contains 24 modules divided into four
sections:
I. Preparing for Diversification. This introductory
section helps managers understand diversification,
the opportunities and risks it poses, and how MFIs
can prepare themselves to diversify successfully.
Module 1 defines product diversification and the
concept of a strategic product mix. It explores
the many reasons for which MFIs might want to
develop new products and markets, but it also
raises awareness of the damage diversification
can cause. Module 2 then explores how to manage
product development, in particular, how to manage
the risks inherent in the process. Module 3 focuses
on new market development. It explores how
managers can use market segmentation to better
understand and serve new types of customers.
II. Product Options. MFIs that wish to diversify will
find they have many options to choose from.
Modules 4 through 13 discuss ten different
types of products that MFIs could introduce to
expand their outreach. Each module explores the
characteristics and requirements of one type of
product using examples from MFIs around the
world to illustrate variations in the way the product
can be delivered. The main challenges and risks
associated with each product type are discussed
together with examples of the strategies MFIs have
used to manage them.
III. Market Segments. Modules 14 through 21 examine
eight market segments with significant potential
for MFI expansion. Each module explores why a
particular segment can be challenging and
discusses the products and product adaptations
that can help institutions serve the segment more
effectively. This section also contains a module on
targeted microfinance which considers the more
general challenge of serving relatively small or
marginalized market segments, such as people with
disabilities and individuals living with HIV/AIDS.
IV. Diversifying Successfully. After exploring numerous
combinations of products and services that MFIs
could offer to better meet the needs of specific
market segments, this fourth and final section
returns to the management agenda. Module 22
looks at the important role of partnerships in
helping MFIs of various types to diversify efficiently
and effectively. Module 23 focuses on the
challenges of delivering a diverse product portfolio.
It raises awareness of the issues that need to be
dealt with and provides specific suggestions for
adapting the institutional culture, redistributing
responsibilities, empowering staff, communicating
with clients, reengineering systems and managing
change. Finally, Module 24 examines the product
portfolio management function and the activities
through which MFIs can not only create but also
maintain a strategic product portfolio over time.
COURSE SCHEDULE
Day1
Day 2
Day 3
Day 4
Day 5
Morning
Opening Session
I. Preparing for
Diversification
1. Understanding
Product
Diversification
II. Product Options
(1-6 sessions)
4. Savings
5. Long-term Savings
and Micropensions
6. Microenterprise
Loans
7. Housing Loans
8. Emergency and
Consumption
Loans
9. Leasing
10. Money Transfers
11. Insurance
12. Non-financial
Services
13. Grants
3. Developing New
Markets
III. Serving Specific
Market Segments
(1-6 sessions)
14. Targeted
Microfinance
15. Pre-Microfinance
for the Poorest
16. Microfinance for
Youth
17. Microfinance for
Women
18. Post-Crisis
Microfinance
19. Islamic
Microfinance
20. Rural Microfinance
21. Sme Finance
III. Serving Specific
Market Segments
(continued)
IV. Diversifying
Successfully
22. Building and
Managing
Partnerships
23. Delivering a
Diverse Product
Portfolio (cont.)
24. Product Portfolio
Management
Afternoon 2. Managing Product
Development
23. Delivering a
Diverse Product
Portfolio
Action Planning
Closing Session
DELIVERY
The modules in Sections I and IV of the course are
standard, core content, but the modules in Sections II and
III are adapted to the needs of each audience. As part of
the registration process, participants choose up to 7 of the
18 modules in Sections II and III to be delivered on Days 2,
3 and 4. The participant’s manual contains content for all
24 modules.
In addition to the standard one-week training, content-
specific executive courses can be organized with the
following delivery formats:
• Half-day courses that focus on a specific product or
market segment
• 1 day courses that focus on improving the performance
of an already diversified product portfolio
• 2-3 day courses that explore the portfolio products that
can meet the needs of a particular market segment
The prerequisite for attending Executive Courses is to
have previously attended a training that included the core
content in sections I and IV.
The Making Microfinance Work Program Outreach
Action plans
developed by
more than 1700
trained managers
Implemented in
47 countries
More than 100
certified trainer
8 working languages
“The course was an eye opener.”
Uganda
“The topics were well selected and well presented with many practical examples.”
Serbia
“It provides state of the art tools and techniques that managers
need to run their institutions better against all odds.” ”
Zimbabwe
ILO and ITC-ILO
The International Labour Organization is a specialized agency of the
United Nations that promotes social justice and internationally recognized
human and labor rights. The ILO has a tripartite structure, with workers
and employers participating as equal partners with governments in its
governance.
The International Training Centre of the ILO provides training and related
services that develop human resources and institutional capabilities. We
thereby contribute to achieving the ILO’s goal of decent work for women
and men. In addition to the activities that the Centre’s training units run,
the ITC ILO also offers training and learning opportunities concerning
cross-cutting issues.
The ILO Turin Centre’s facilities
Located in an attractive park on the banks of the River Po, the Centre’s
campus provides a congenial environment in which to live and study.It
contains 21 pavilions with fully equipped modern classrooms, conference
halls and meeting rooms fitted out for multilingual simultaneous
interpretation, a computer laboratory, and a computerized documentation
centre linked to various data banks.
The campus has 287 study/bedrooms, all with private bathrooms,
telephones and cable television.
It also has: a reception desk open 24 hours a day; a restaurant, a self-
service canteen and a coffee lounge, all catering for international dietary
needs; a bank; a travel agency; a laundry service; a post office; an internet
point; a recreation room; facilities for outdoor and indoor sports; an
infirmary.
Social events are regularly held both on and off campus, so that
participants from different cultural backgrounds can make the most of the
stimulating international climate.
For further information, please contact International Training Center of the ILO
Viale Maestri del Lavoro, 10 - 10127 Turin, Italy
Phone: +39 011 6936111 - Fax: +39 011 6638842
http://www.itcilo.org
http://mmw.itcilo.org/en/home/home-page
Contact person:
Margarita Lalayan: [email protected]
Design: Luca Fiore – Printed by the International Training Centre of the ILO, Turin, Italy
Made of paper awarded the European Union Eco-label, reg.nr FR/011/002, supplied by International Paper.