The good news for the microfinance sector in India is the robust growth it has displayed during 2013. When the going is good, we tend to get complacent. Growth needs to be applauded, no doubt. But we must also critically analyze what has made this possible. Better availability of on-lending funds as well as risk capital, definitely is important.
Given that M2i’s institutional mandate is to contribute to sustainable markets, we focus on the asset side and keep looking at factors other than capital – the ones that allow capital to play its intended role. Lately, our lens has been on issues that concern operational employees of MFIs.
Let me present some facts through two tables (data from MFIN’s micrometer – issue 09, 31 March 2014):
Table 1: Staff productivity
|#||Employees||Clients (mn)||Glp (Rs bn)||Glp per employee (Rs mn)||Clients per employee|
Table 2: Improvement in staff productivity during 2013-14 measured by % change
|Glp per employee (Rs mn)||23%|
|Clients per employee||9%|
Over the last one year, the amount of outstanding loan being handled by MFI employees on an average has gone up by 23%. The client per employee by 9%. This is a happy fact, however, we also need to apply our critical lens and ask whether the productivity gains are sustainable, given that higher staff productivity also means higher expectations from them.
Let me quote this box from Satin and M2i’s paper on – “Drive to Perform” of Operational Employees of MFIs – to give you an idea of the work environment of operational employees of MFIs.
|How the days of the Operational Employees of Satin look like?Customer Service Officer (CSO): Satin’s loan officers are called CSOs. A typical CSO may spend well up-to eight hours in the field performing the following activities
At the branch office, the CSO needs to deposit the cash collected during the meetings, prepare files for disbursements planned during the day, update MIS, and complete documentation for those loan applications that are in process.
Branch Manager (BM): A Branch Manager is responsible for the operations of a branch and has a team of between 4 and 6 CSOs to support him. His day also involves extensive field work as well as office work. In a day he may have to do the following activities:
Performing banking transactions which include depositing loan repayments collected in banks, withdrawing money from bank for disbursements
Ensuring end of day procedures such as update of MIS, reconciliation of cash etc
Operational employees, particularly loan officers and branch managers, are critical cogs which keep microfinance moving. The issues that concern their motivation have not received adequate attention. It is high time that we seek answers to the following questions:
- What is it that operational employees of MFIs like about their jobs?
- What are the perceptions of the operational employees of MFIs regarding their primary job-objectives?
- What are the sources of anxiety for operational employees of MFIs?