Supporting sustainable human capacity development in MFIs
PRESENTATIONS
Carmelo A. COCUZZA explained that the EIB has been active in microfinance for 26 years, supporting 78 intermediaries, with an outreach to almost 1.5 million beneficiaries. Along with its equity and loan products, EIB offers technical assistance (TA) to intermediaries, based on need assessments, through selected service providers. These include ADG and Frankfurt School of Finance & Management. As in most interventions, TA is linked to project timelines and the sustainability of capacity building interventions is key. Questions are: how to invest in training services, through what institutions and what are Training-of-Trainer (ToR) success factors.
Willemien LIBOIS, Africa Director of Frankfurt School of Finance & Management, provided her experience in education in the African banking sector. She stressed that overcoming the financial sector’s skills gap is vital for economic development, in particular in Africa. Here the financial sector is facing massive changes in the context in which it operates in terms of technology, regulation, economic transformation and financial sector development. Also, higher education for business development is relatively underdeveloped, with only around ten institutions meeting international requirements.
At the same time, academic and professional education is becoming increasingly diverse; including academia, banking institutes, and new delivery channels. She stressed that overcoming challenges of Banking Institutes requires close collaboration between universities, financial institutions and Banking Institutes. These challenges include a lack of resources, curriculum and training formats not being relevant to sector requirements and a lack of credibility of qualifications. Willemien Libois explained how training courses were designed, looking at questions around topics, duration, level and formats (in-house or public) to develop an annual training catalogue with institutional and individual options. Lessons learned included appreciation of short-term courses, using mixed teaching methods. She also explained how localising international best practices in combination with consideration for on-the-job circumstances had a positive impact. A particular issue is recognition of courses for job development, further education and accreditation. Course examples include portfolio management, digital financial services, IFRS 9, risk management and leadership.
Victoria CHANDA MUMBA, the CEO of the Zambia Institute of Banking & Financial Services (ZIBFS) provided her institute’s vast experience on capacity development. She indicated that ZIBFS’ objectives all lead to raising banking and financial services standards, ethical conduct and professionalism in Zambia according to global best practices. ZIBFS offers a variety of certificate and diploma programmes, ranging from basic to professional, advanced professional and post-graduate levels. She stressed that there is often a preference for customised, in-house training as financial institutions (bank and non-bank) are mostly concerned about opening up to competitors.
She further emphasised that partnerships, which include donors such as the World Bank, international service providers, local industry bodies and academic institutions, play a vital role in achieving sustainable human capacity development in the financial sector. In collaboration with the EIB and Frankfurt School, ZIBFS worked on the Banking and Finance Academy brand. The academy offers high quality technical training to the Zambian financial sector, balancing between local and international expertise. She particularly underlined the collaboration with the Zambian Central Bank (Bank of Zambia).
As next steps, Chanda Mumba mentioned the need to increase professionalism and ethical conduct among financial sector professionals and harmonise and raise standards of banking and finance education in Zambia. Furthermore, ZIBFS wants to ensure its brand becomes internationally recognised.
Isabelle KATTHAGEN focused specifically on success factors for Training-of-Trainer programmes in the financial sector, referring specifically to EIB’s TA programme in East Africa managed by ADG. In terms of “who”, she stressed the need to assess skills and motivation in participant selection, providing the example of heads of departments getting a training as a reward without having the motivation/time to share lessons learned with their institution. Selection could be done through motivation letters. If trainers are not involved in selection, they can do in-training selection of the highest capacity and most motivated participants in order to identify future trainers.
In terms of “what”, she explained retention is improved when training formats move from just listening, to making issues visible (seeing), discussing them and exercising with them through real-life or on-the-job assignments. In terms of “why”, she indicated that in order to increase impact the focus of programmes needs to be on moving from knowing, to doing, to applying and finally to transferring. Here Katthagen also referred to the importance of increasing staff retention. She ended by stating that nothing beats practice; practicing theory in on-the-job situations and applying it in daily work maximises impact of training.
DISCUSSION
The discussion revolved around three main subjects: who should provide training, whether in-house or public training is best, and how to retain staff which was trained.
It was concluded that human capacity development requires a balance between in-house and classroom training. Providers need to carefully consider where courses can be offered in an open forum, such as on subjects which are applicable across institutions or relate to non-competitive issues. In these cases trainees can benefit from inter-institutional learning. In other cases, courses can be better catered to particular financial institutions because they either revolve around topics seen as competitive, are looking at organisational values, or are around systems which are specific to financial institutions. Looking at who can provide training, Chanda Mumba added that such decisions depend on the size of the financial institutions (e.g. bigger financial institutions have more in-house capacity), and whether the topic is entry-level, procedural or technical. In many cases partnerships are required with training institutes or academia adding specific technical skills, credentials or best practice models.
In terms of form, combined delivery models were seen as most effective, combining e-learning and class room training, while ensuring that training meets timelines of trainees. Good practice combines localised international best practices, and (on the-job) practical application.
In terms of staff retention, Isabelle Katthagen indicated that HR is often seen as only hiring and firing. She disagreed, stating that good human resource management is vital in retaining staff. A focus on “poaching” of trained staff drives institutions away from investing in human capacities. Instead institutions should work on retention of staff in terms of remuneration, but also professional development, career opportunities, building pride and loyalty, and non-financial benefits. Human resource departments should play a central role in this process.