Grameen Foundation Increasing Support for Strategic Human Capital Practices in Indian Microfinance Sector
Initiative Will Provide Model for Global Microfinance Industry
March 14, 2011 - Grameen Foundation today announced it is increasing efforts to improve human capital management strategies at socially-focused microfinance institutions (MFIs) in India. The push, which comes as the Indian sector is slowly rebuilding after recent upheaval, will be supported through funding from Citi Foundation, The McGraw-Hill Companies and The Capital Group totaling $550,000.
This announcement comes just as Indian microfinance leaders are preparing to discuss ways to reengineer the industry at a National Microfinance Conference sponsored by Sa-Dhan and the Federation of Indian Chambers of Commerce and Industry.
Last year’s unrest in Andhra Pradesh highlighted the need for MFIs to pay closer attention to their institutional strength and retool their “people practices”. This was underscored by the findings of the globally-focused 2011 Microfinance Banana Skins report which identified reputational risk, corporate governance, management quality, staffing and mission drift as being key concerns among practitioners and other key industry stakeholders.
Grameen Foundation also released today an analysis of the human capital issues identified in the Banana Skins report, which is available at http://www.grameenfoundation.org/BananaSkinsReview
“The microfinance industry is at a critical juncture in its development and this moment provides an important opportunity to reexamine practices especially in areas such as human capital management that make up a major cost center for the sector, and could translate into greater impact on poverty and better overall performance,” said Alex Counts, president and CEO of Grameen Foundation. “India is one of the bellwethers of the industry and we believe our work there will demonstrate how microfinance institutions can create more value for the poor at lower cost by upgrading human capital management strategies.”
Grameen Foundation India Private Limited (GFI), a wholly-owned subsidiary of Grameen Foundation, will spearhead the work in India. Leadership support from Citi will focus on increasing employee commitment and effectiveness, especially in the context of client protection — a critical issue for Indian MFIs facing the pressures of explosive growth, heightened competition and increasing commercialization. Additional funding from The McGraw-Hill Companies and The Capital Group Companies will focus on leadership development for MFI mid-level managers who are often tasked with leading scores of field officers with little or no management training. Leadership development at this middle management level is also vital for the future governance of MFIs.
“Citi and the Citi Foundation have been at the forefront in making microfinance an integral part of the global financial infrastructure, but we are also deeply invested in ensuring the quality of microfinance products and services,” said Pam Flaherty, President and CEO of Citi Foundation. “Given the challenges that come with rapid growth in any industry, the work of the Grameen Foundation is more important than ever in setting best practices for developing innovative and impactful human capital products and services in the microfinance sector.”
About Grameen Foundation India Private Limited
Grameen Foundation India (GFI) is a social business that focuses on promoting access to microfinance and technology services that will benefit India’s poorest people. Established in keeping with the principles of Professor Muhammad Yunus, GFI will build on Grameen Foundation’s decade long experience in India to provide technology, human resource management tools and practices, and new business models to poverty-focused social enterprises across the country.
About Grameen Foundation
Grameen Foundation, a global nonprofit organization, helps the world’s poorest people lift themselves out of poverty by providing access to financing, technology solutions and management strategies to the local organizations that serve them. It also develops mobile phone-based solutions that address “information poverty” among the poor by providing tools, information and services in the fields of health, agriculture, financial services and livelihood creation. Founded in 1997, Grameen Foundation has offices in Washington, DC; Seattle, WA; Colombia; Ghana; Hong Kong; the Philippines; and Uganda. Microfinance pioneer Dr. Muhammad Yunus, founder of Grameen Bank and winner of the 2006 Nobel Peace Prize, is a founding member of its Board of Directors, and now serves as director emeritus. For more information, please visit grameenfoundation.org.