Management Matters: Training for MFI Managers Now Online

July 20, 2009    

The uneven quality of management in microfinance institutions has long been identified as one of the greatest risk to the growth of the microfinance industry. Indeed, respondents to the 2008 Banana Skins Survey, identified management capacity and weak corporate governance as the top challenge at a time of rapid change. So what are we doing about it?

In 1997 CGAP launched a pilot program in Africa to provide financial management courses to microfinance institutions. The pilot turned into a full training program. Ten years later, CGAP and our 39 training partners have trained more than 12,000 people in 52 countries. Partners around the world continue to offer the seven CGAP Skills for Microfinance Managers courses in several languages.

How did we get here?
The Pilot initiative was designed to improve the institutional viability of MFIs in Africa; and to enhance the human resource base in microfinance in Africa through sustainable training programs that would help develop stronger MFIs and increase the market for local training services.

A couple of years later, the Africa Pilot program had become the MFI Training Program, with new partners in South and South-East Asia, Central Europe, and the Newly Independent States (NIS). In addition, CGAP launched AFCAP, an East/Southern Africa program focusing on 12 countries and CAPAF, focusing on 19 countries in Francophone Africa and Haiti, to build the capacity of national training service providers to offer training and consulting services.

The program then expanded to provide training of trainers workshops to new partners in the Middle East/North Africa and Latin America and in 2006, CGAP handed off the training program to the Microfinance Management Institute to create a global network of training institutions, MBA programs and universities.

Through this global initiative, CGAP developed seven short and practical courses for MFI managers incorporating adult training design: the Skills for Microfinance Managers series. Based on feedback from trainers and participants from hundreds of courses, the courses have been revised and improved.

Now what? “Under the training program, we reached thousands of people,” says Jennifer Isern, Lead Microfinance Specialist at CGAP and one of the original instigators of the CGAP Training Program. “But we knew that many more people would find the course materials useful. So we are now making the full courses and trainer notes available. Before posting them, we decided to update the earlier courses that were designed in the late 1990s to make sure they conform with the industry’s evolution and current standards – especially in terms of financial statements, reporting and ratios.”

CGAP has extensively revised and updated three of the seven courses to include current standards and has included new up-to-date references in the introduction of each course.

What’s in the courses?
Each course is designed to be given over three to five days of intensive classroom training, ideally with a minimum of two experienced and technically knowledgeable trainers and a maximum number of 25-30 participants. 

The course curriculum focuses on hands-on, practical exercices and case studies and encourages active participation, in keeping with the latest adult learning theory:

Managing Delinquency and Interest Rate Setting: how to determine the causes and costs of delinquency, measure and control arrears and calculate effective interest rates and the costs of credit for clients.

Financial Analysis: how to format financial statements for decision making, adjust for inflation and subsidies and analyze portfolio quality, sustainability and profitability, efficiency and productivity, and asset/liability management.

Accounting for Microfinance Managers: an introduction for MFI managers to the basic principles, methods and procedures of accounting.

Business Planning: how to define institutional mission, goals, and objectives, understand clients and markets, carry out environmental and institutional assessments, and design a strategy.

Operational Risk Management: how to develop and improve the quality of internal controls and risk management processes. 

Product Development: how to develop a new product (market definition, market research, product prototype, costing and pricing, pilot testing, rollout, marketing, lifecycle management, and so forth) and to identify the impact of introducing new products on the MFI (human resources, corporate culture, operations and systems, financial results, operating results, and the like).

Information Systems: how to conceptualize, assess, design, develop, implement, roll out, and maintain information systems for an MFI.

Visit the courses page and register to download the materials.