FROM THE MARGINS
In microfinance, clients must come first. Microfinance institutions (MFIs) differ from traditional financial institutions because they maintain close relationships with their clients, who are organized into ‘centers’ that meet weekly with their account officers (AOs). The AOs are the MFIs’ frontliners. Responsible for achieving loan volume targets while maintaining sound credit quality and good customer service, they are the face of the MFIs in the communities. They actively develop centers through regular meetings, visits and trainings. The AOs play a crucial role in the MFIs’ operations, as they initiate credit and collection activities, evaluate loan applications, promote microinsurance and other products, and train clients on savings and credit discipline. In times of crises, they even visit the communities to check on their members’ well-being. How do MFIs recruit and prepare AOs for their challenging work? Here are some of their best practices:
1.Recruiting people with the right attitude. AOs should have a genuine desire to help and work with the poor. This, perhaps even more than professional qualifications, is the most important consideration in AO recruitment. From my experience, it is better to recruit from small colleges and universities in the provinces rather than the well-known schools in Metro Manila and key cities. Local graduates are more patient and sympathetic to the nanays, thus, are better at customer relations. Working students are also better recruits because they have the intrinsic desire to succeed in their chosen career. They are very willing to learn and can communicate better with the nanays, having experienced poverty themselves. The children of clients are also good recruits, as they have experienced first-hand the benefits of microfinance and understand MFI procedures after observing their mothers’ participation in weekly center meetings.
2.Rotating AO assignments. It is best not to assign AOs in areas/villages where they come from. As the saying goes – walang naging santo sa sariling bayan! Staff assigned in their areas of origin experience a lot of pressure from relatives and friends which hinder their objectivity, sometimes even influencing their assessment of loan requests. To avoid this, MFIs usually assign AOs in areas hours away from their residence. They also rotate AOs’ areas of assignment every two to three years, to avoid over-familiarity with clients. In the business of microfinance, good client relations are important but maintaining professional distance is crucial. I have seen cases of AOs becoming too friendly with clients that they approve loans beyond advisable levels, or they borrow from clients, or worse, connive with center officers and have ghost borrowers! Staff rotation is a good management practice and check-and-balance in MFI operations.
3.Center meetings. AOs need to be trained to organize and manage center meetings. They should be able to continuously motivate members to attend, not only to get loans or deposit savings but to learn during Credit-with-Education sessions. AOs visit communities properly dressed and groomed to command respect, even as they offer services and goodwill to clients. It is heartwarming to note that most clients see their AOs not as mere collectors of loans/savings but as role models and facilitators of change in the communities. They tend to address AOs as “Ma’am” and “Sir” -- not surprising, since AOs train them on financial literacy, disaster management, health issues, family planning, environmental protection and climate change, among others. This is a source of pride and fulfillment for many AOs.
4.Proper bookkeeping and loan utilization check. AOs are taught proper record-keeping and to issue receipts for every financial transaction. They must ensure that clients are using their loans for the intended income-generating projects, so they are also trained to conduct loan utilization check and clients’ business inventory after loan approval.
5.Staff training and development. AOs are properly trained before deployment to ensure values formation and internalization of the MFI’s mission to help the poor. Training interventions usually run for two-weeks, to include field exposure or on-the-job training so AOs will experience first-hand how to handle clients. This is the best way to know if the AO will be suitable for the job or if s(he) will like it. This is also a cleansing process for AOs who are not sure about their chosen career path.
The best MFIs expose their AOs to regular training programs to develop their skills and attitude. These trainings enable AOs to not just perform their jobs more effectively; they also pave the way for career growth. After all, as AOs build their competence, they are usually promoted to higher positions and assume bigger responsibilities in the organization.
Kudos to microfinance frontliners, the AOs who support communities and provide the services most needed by clients. You are heroes, taking to heart these beautiful words of the philosopher John Ruskin: “The highest reward for man’s toil is not what he gets for it, but what he becomes by it.”
(Dr. Jaime Aristotle B. Alip is a poverty eradication advocate. He is the founder of the Center for Agriculture and Rural Development Mutually-Reinforcing Institutions (CARD MRI), a group of 23 organizations that provide social development services to eight million economically-disadvantaged Filipinos and insure more than 27 million nationwide.)