Most MFIs have emerged from development background, where

developed for catering to the needs of other segments. Though

their strength has been in the area of working with the community.

methodologies for savings and credit services have been

Yet, with the mainstreaming and scaling up of microfinance, the

simplified and standardised in many places, most MFIs are

character of the manpower will have to go through significant

struggling with other financial services, such as insurance and

changes. These agencies will have to worry about how these

retirement fund for the poor. Thus, the industry will still have to

skills of working with the community can be transferred to a large

make conscious efforts to innovate and standardise new products

number of new entrants, and reasonably quickly.

for some more years to come.

The third area of training is going to be in understanding

The microfinance industry is also witnessing a very rapid change

commercial viability. Microfinance extends financial services to

in the policy and regulatory environment. In many countries

the producers for a wide variety of reasons. In the very early

world over microfinance has been recognised as an important

stages of such a programme, especially in economically weaker

instrument for poverty alleviation. The policies, which were not

areas, these funds are used for meeting deficits in consumption

at all favourable, even a few years back have started changing

expenditures, or for meeting emergency cash flow needs. But as

their colours. However, this transition has a serious implication

the programme stabilises, many people complete their second or

on the players in the industry. Different interest groups, the micro-

third lending cycle, they start investing in economic activities.

finance service providers, the support institutions and the policy

Understanding the commercial viability of these activities proposed

makers need to dialogue with each other at this phase, till the

to be taken up, both individually and as a portfolio, becomes

new policy framework stabilises.

critical for the micro-finance practitioner at this stage.

Implication on Training of Human Resources

The fourth area of training is `Training of Trainers'. As most MFIs

are involved in building people's institutions, which in the long run

The salient features of the microfinance industry discussed above

will manage their own finances, one of the significant component

have serious implications on the nature of human resources.

of their work will always be to build the competencies of the

First issue that needs to be recognised is the diversity of functions.

people who manage these institutions. Therefore, they themselves

This being an emerging sector, there is a need for developing

will have to be trained in building their competencies, or what has

new financial products, need for policy dialogue. Sometimes

been popularly known as Training of Trainers.

there is also the need for extending credit plus services. On the

other hand, there is a need for standardised operating procedures.

Last few years of the twentieth century has witnessed phenomenal

changes in the information technology, opening the doors of many

The nature of tasks involved in developing new financial products/

new feasible options. These will have a significant implication on

processes to serve the customer better and delivering a standard

the microfinance field. Money, which is the primary commodity

service to a large number of customers using the same procedure

that the microfinance field deals in, can easily be transacted through

every day, are so diverse that it is unlikely that the same set of

the new technologies. It also helps capture the multiple and large

people will be able to take up both. The motivation pattern for

volumes of transactions. It also has serious implications for the

both these groups, their backgrounds and their career progress

transaction costs, which the microfinance sector tries to minimise.

path are likely to be very different. Often, it is assumed that the

Therefore, training in information technology will be a significant

routine finance operations are performed by less qualified, less

component of training for micro-finance sector.

expensive staff. But that poses a serious constraint on the scale

of operations. For effectively managing, even the standard

MFIs operate within a legal framework, which is often alien to the

operations of the scale that is required, very highly trained

context in which they work. The legal environment is also changing

manpower will be necessary for the micro-finance institutions.

substantially in the recent time. Microfinance has made its new

Therefore, two very different kinds of training processes need to

niche in this framework. As microfinance practitioners often handle

be designed for two different groups.

the responsibilities of other people's money, especially of the

vulnerable group of people, it also becomes important for them to

understand this legal environment. Especially, now that a new

However, as microfinance is about finance, both the groups

collaborating relationship with the state is emerging, it is important

would need some detailed training in finance. This component of

for the micro-finance practitioners to understand the legal

the training acquires significance from the fact that large majority

framework, which is the primary instrument the state works with.

of MFIs have emerged from development background, with most

of their staff inadequately trained in this area. As a result, this

However, designers of such training programmes will have to

input needs to become more that just training in financial skills.

keep in mind that content of the training in the areas of (i) finance,

These inputs should be designed to help people think financially.

(ii) community work, (iii) commercial viability, (iv) information

It should help them in handling large volumes of financial

technology and (v) the legal environment, will have to be different

transactions, with large sums of finance.

for the two groups of human resources indicated earlier.

The second area, where training is going to be critical is ability to

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work with people from the disadvantaged sections of the society.

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