66thth EMN Conference EMN ConferenceMicrofinance and its Growth in Europe:Microfinance and its Growth in Europe:

Consequences, challenges, Consequences, challenges, opportunitiesopportunities

Workshop:Workshop: “How to manage the growth of your “How to manage the growth of your

staff?”staff?”prof. Roberto Moro Viscontiprof. Roberto Moro Visconti

Università Cattolica - MILANOUniversità Cattolica - MILANO

M – banking and HRM – banking and HR branchless banking at any time can deeply change branchless banking at any time can deeply change

HR management within the microfinance industry:HR management within the microfinance industry:

less branches, fewer logistic & transportation costsless branches, fewer logistic & transportation costs more ICT developmentmore ICT development HR have to adapt to a profoundly changing HR have to adapt to a profoundly changing

business model (e.g., see how ICT has changed business model (e.g., see how ICT has changed traditional banks)traditional banks)

fewer and more centralized employees with higher fewer and more centralized employees with higher technical skillstechnical skills

possibility of some economies of scale, able to possibility of some economies of scale, able to reduce operating costsreduce operating costs

M – banking trendsM – banking trends Ten years ago, there was no active m-banking. Ten years ago, there was no active m-banking.

Global cell phone penetration stood at 8% (0% Global cell phone penetration stood at 8% (0% among low income countries).among low income countries).

Now, in 2009, much has changed: branchless Now, in 2009, much has changed: branchless banking channels are now widely accepted as a banking channels are now widely accepted as a means of extending the reach of the banking means of extending the reach of the banking system. system.

The potential of m-banking is sometimes The potential of m-banking is sometimes described in breathless terms, based in part on described in breathless terms, based in part on the meteoric increase in wireless coverage. the meteoric increase in wireless coverage. Some 80% of the world’s population is within Some 80% of the world’s population is within coverage and there are more than 4 billion cell coverage and there are more than 4 billion cell phone subscriptions.phone subscriptions.

from mobile to branchless from mobile to branchless bankingbanking

Mobile bankingMobile banking is a term used for is a term used for performing balance checks, performing balance checks, account transactions, payments account transactions, payments etc. via a mobile device such as a etc. via a mobile device such as a mobile mobile phonephone.. Mobile banking Mobile banking today (2007) is most often today (2007) is most often performed via SMS or the Mobile performed via SMS or the Mobile Internet ...Internet ...

wireless penetration trendswireless penetration trends

M – banking: strategic drivers M – banking: strategic drivers and HRand HR

Academic training of HR in Academic training of HR in MFMF

is it better to train MF officers at their home or in is it better to train MF officers at their home or in Western countries ?Western countries ?

pros and conspros and cons external versus domestic trainingexternal versus domestic training the Academic experience is mixed:the Academic experience is mixed: few professors are expert of MF; need for a more tailor few professors are expert of MF; need for a more tailor

made and professional orientationmade and professional orientation studying and reading books is not enough: practical studying and reading books is not enough: practical

on field experience is highly wantedon field experience is highly wanted students often don’t have any previous job experiencestudents often don’t have any previous job experience a basic economic backgroung is recommendeda basic economic backgroung is recommended

Human Resources Human Resources Best PracticesBest Practices

The best practices in the management The best practices in the management of human resources are the ones of human resources are the ones which:which:

optimize a workforce so that it can not optimize a workforce so that it can not only get more done, only get more done,

but also ensure a greater level of but also ensure a greater level of efficiency, timeliness and quality as it efficiency, timeliness and quality as it accomplishes increases productivity accomplishes increases productivity overall.overall.

The important areas in which the best The important areas in which the best human resources practices must be human resources practices must be applied include the creation of viable and applied include the creation of viable and attractive benefits and compensation attractive benefits and compensation packages: packages:

managing the performance of employees,managing the performance of employees, making sure that business practices and making sure that business practices and

worker conditions stay well within the worker conditions stay well within the law,law,

creating a positive, enjoyable work creating a positive, enjoyable work environment, talent recruitmentenvironment, talent recruitment

mapping out the best human resources mapping out the best human resources strategy for the future. strategy for the future.

looking for incentives …looking for incentives …

When browsing job listings, two of When browsing job listings, two of the first features that prospective the first features that prospective talent looks for are:talent looks for are:

the salary levels the salary levels and the benefits packages. and the benefits packages.

Best practices - HRBest practices - HR An important aspect of best practices when it An important aspect of best practices when it

comes to providing optimal human resources comes to providing optimal human resources services is the accurate and productive services is the accurate and productive evaluation and enhancement of performance evaluation and enhancement of performance among the employee base. among the employee base.

performance management is one of the key performance management is one of the key functions of a human resources department, functions of a human resources department, and should be approached with any one of a and should be approached with any one of a number of the proven techniques of metrics number of the proven techniques of metrics and evaluation that strives toward best and evaluation that strives toward best practices in the realm of performance practices in the realm of performance management. management.

As human resources is all As human resources is all about maintaining a positive about maintaining a positive and productive work and productive work environment, best practices environment, best practices helps to make sure that helps to make sure that employees feel good about employees feel good about the company they work for.the company they work for.In MF, a social mission target In MF, a social mission target is important for the is important for the motivationmotivation

HUMAN RESOURCES HUMAN RESOURCES BOTTLENECKBOTTLENECK

The development finance industry is increasingly recognizing The development finance industry is increasingly recognizing its human resource “bottleneck”:  its human resource “bottleneck”: 

skilled middle and senior managers are difficult to find and skilled middle and senior managers are difficult to find and retain; retain;

HR departments lack tools and systems to service ever-HR departments lack tools and systems to service ever-growing staff; limited resources are available for training and growing staff; limited resources are available for training and skills enhancement; and there is almost no knowledge skills enhancement; and there is almost no knowledge sharing around best practices.  sharing around best practices. 

According to some industry estimates, in order to meet the According to some industry estimates, in order to meet the anticipated demand for microfinance, the industry will have anticipated demand for microfinance, the industry will have to hire 12.5 million new loan officers, assuming a loan officer to hire 12.5 million new loan officers, assuming a loan officer to client ratio of 1:300.  This bottleneck threatens to to client ratio of 1:300.  This bottleneck threatens to constrain the growth, success and development potential of constrain the growth, success and development potential of high-growth microfinance and small business finance high-growth microfinance and small business finance providers. providers.

https://www.microfinanceinsights.com/

Problems and Problems and recommendationsrecommendations

the sector offers little in the way of the sector offers little in the way of career planning or a clear career planning or a clear advancement strategy for staff advancement strategy for staff

many organizations have not many organizations have not implemented or put in place formal implemented or put in place formal training policies. training policies.

many MFIs have no incentive system many MFIs have no incentive system in place, or if they do, then they are in place, or if they do, then they are incomplete or not properly used.  incomplete or not properly used. 

need for HR information systems or need for HR information systems or automation of current HR systems, automation of current HR systems, i.e. technology issues i.e. technology issues

staff capacity building and training staff capacity building and training training and/or technical assistance training and/or technical assistance

in HR is a “Top priority–among the in HR is a “Top priority–among the most urgent needs” most urgent needs”

Human Capital Management

System Rewards

CultureHR Planning

Recruitment & Selection

Learning & Development Retention &

Engagement

Performance Planning &

Management

recent trendsrecent trends due to the financial crisis, many due to the financial crisis, many

banks in western countries are banks in western countries are expelling qualified workersexpelling qualified workers

they may quite easily be ricycled in they may quite easily be ricycled in the MF industrythe MF industry