Issues before the Sa-Dhan's Training Sub-Group+

L

ooking back to the history of India's poverty alleviation

of Sa-Dhan must not only focus to improve the quality of services,

programmes, we find that hitherto, a huge sum has been

but should also lead to the creation of a large number of community

spent by the government on programmes directly targeted at the

development financial institutions. Therefore, the training

poor. A substantial share has been spent in the form of grants

programmes should not aimed at just building technical skills but

and subsidised credit to the poor via formal financial institutions.

to develop a holistic perspective about Microfinance. Thesetraining

However, these subsidies, for various reasons have not really

programmes must be able to challenge the creativity of the

helped the poor. A realisation has gained ground that the model

participants.

of delivering development aid to the poor, has inherent design

fault and is unable to reach out to the poor effectively. The

For many NGOs, the Microfinance programme is combined with

discrepancies in the model are primarily due to a lack of

a variety of business development services and linkages with

appreciation of the nature of the problems faced by the poor and

services like health and education. Thus, the training programme

the kind of assistance required by them.

needs to be of high quality so these organisations may able to

establish a strong Microfinance delivery system and then build

Microfinance sector in the country is still in an evolving stage.

upon it.

The principles of Microfinance are still not articulated well enough

and have been adopted by various players to various degrees.

Last, but not least is the issue of resources for carrying out a

Thus, we see that while the finance ministry encourages institutions

large-scale capacity building intervention in the Microfinance

like NABARD and the banks to scale up the SHG linkage

sector. Since not much advocacy has been done at the policy

programmes, the rural development ministry still follows the principle

level by the present set of practitioners for allocation of funds for

of distributing overt subsidy in its various programmes. While,

capacity building, not much funds have been forthcoming. Sa-

many organisations look at Microfinance from the commercial

Dhan should strive to pursue policy makers to allocate more

point of view and argue for deregulation of the interest rates, on

funds for capacity building of MFIs and put them in effective use.

the other hand, others believe in fixing a cap on the rate of

interest of the loan to the end user. It will be long time before all

An agenda for interventions by Sa- Dhan could be derived from

the practitioners of microfinance fully appreciate diversity and

such a scenario. A brief description of the same will be as follows:

agree to operate under some broad common principles.

(I) Develop an understanding of the competencies and

shortcomings of the actors involved. Accordingly, identify the

The first challenge that Sa-Dhan faces is to bring the various

capacity building needs and prepare a directory of practitioners

actors under a common umbrella and get them to agree on the

possessing those abilities. A complementary relation can be build

broad principles. The training and capacity building programme

up by bringing these two sets of people together. It can be facilitated

of Sa-Dhan also must primarily focus on disseminating these

through mutual sharing events like meetings/workshops or

principles and get increasingly small and large organisations to

through structured training programmes. The underlying assumption

deliver Microfinance services to the poor, in an effective manner.

is that the required knowledge and capacity exists within the system.

What is required is to build an Extended Faculty Group, drawn

Second issue that Sa-Dhan needs to address is, the absence of

from different regions, who will further train people at regional

a mechanism for capitalising the experiences of a large number

level so that uniform growth across the region can be achieved.

of players operating in various parts of the country. Among them,

(II) Sa-Dhan has to facilitate events and programme as per the

NGOs mainly, there are very few who are equipped with in

needs expressed by the clientele. Sa-Dhan also has to design an

depth knowledge of the different aspects of Microfinance.

overall training strategy. The principles for designing a strategy

Documenting different models and its variations in existence and

would be:

its dissemination will open the way for innovation and replication.

Decentralisation:The training programmes should be at

dispersed locations and delivered to the clients as close as possible.

Thirdly, delivering Microfinance service is highly human resource

This will help the programme to be situation and client specific.

intensive and needs a highly professional approach. It can't be

Dynamic Design: The design of the programme should be

delivered mechanically, instead it needs an innovative approach

frozen only to an extent. It needs to evolve from programme to

that suits the features of the client (vary considerably in the case

programme, again as per the needs expressed by the clientele.

of poor). It requires people who are creative and conceptually

Strategically priced: The programmes should be financially

sound. Therefore, it is imperative to develop a set of skilled

sustainable. The pricing should be such that it is neither prohibitively

people with professional approach and get them involved in the

costly to miss out on serious clients with little capacity to pay nor

Microfinance sector.

too cheap to encourage people with no long term commitments.

**********

Fourth, acknowledging the fact that there is enormity of need for

unmet Microfinance services in the country, it becomes necessary

+ Strategic Discussions of the Sa-Dhan sub-group on

to facilitate the growth of organisations delivering Microfinance

training, headed by Ms. Vijiyalakshmi Das, FWWB. Written by

services. Therefore, the training and capacity building programme

Santosh Sharma.

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