Speech From Executive Director


Advin Barun Banerjee

Executive Director

F/s 2016-17 was spent with lot of optimism amid many challenges particularly with respect to maintaining staff discipline and containing non-repayment of loan by Savings and Credit Group (Samity) members. Maintaining staff disciplines was the most dominant aspect of microfinance operation. Dealing with huge amount of cash every day by frontline workers (Credit Organizers/Loan Officers) was very tempting and some of them strayed and pocketed a part of daily collection from Samity Members. Pidim delineated its policies to combat such petty crime by creating conducive work environment and introduction of competitive salary package and incentives including yearly salary increment. Staff salary was time to time raised to match that with other parallel MFI (Microfinance Institutions). Besides, field staffs were given quarterly allowances based on individual job performance, which helped generate healthy competition among the staff for better performance of job. Pidim also declared ‘retirement benefit package’ for its staff. Under the package the staff will be entitled to a hefty amount of money on retirement. On the other hand, Pidim pursued a policy of ‘Zero Tolerance’ against financial corruption. Anybody found guilty of stealing office money was sacked immediately without any leniency. There were other aspects of fraud management. It was observed that staff became disillusion and wanted to quit the organization when they failed to do their job properly owing to workload and often lacking capacity to deal with manipulative Samity members. Sometimes frustration eroded moral values of some of the staffs, who eventually got involved in financial corruption. Considering the matter Pidim took several steps to help poor-performers hone their job skills and build self-confidence. They included mentorship and personal counseling by their supervisors and sometimes by their coworkers adept in their job and known for mental fortitude. Staff management was also constrained by high staff turnover rate. Because of that hiring of field staff was done more often. It became difficult for new staff to work with full-load. So it became an imperative to reduce work load of field workers. This was done by slowly moving away from weekly to monthly repayment schedules based on borrower’s capacity and type of investment sector. All those initiatives eventually contributed to improve job skills and perk up staff morale.

The other most challenging aspect of microfinance program was to contain overdue loan. The nature of the problem of non-repayment of loan by the Samity Members had changed over last couple of years. The organization previously had lesser problems of realizing loans from the members within three years of their joining to microfinance program. But the situation had changed. A large number of borrowers defaulted on loan taken first time. Borrowing of money from different MFI without considering their capacity to repay gave rise to the problem. This reckless behavior creates problem for both the lenders and the borrowers. In other situations many Samity Members having solid track record of repaying debts for many years, eventually dropped out of microfinance program. Poor return from investment of loan was one of the seminal causes of failure to repay loan in time. Lack of job skills and selection of improper investment sectors led to the situation. In view of this Pidim adapted its policy requiring thorough examination of loan profile and investment sector before sanctioning loan. Information was also gathered on loan repayment behavior of borrowers with other MFI. All these procedures were maintained in order to keep loan from falling into wrong hand. Pidim also embarked on IGA sector development by holding training and workshop with poultry and dairy farm owners. Pidim organized the training with the help of officials from GOB livestock department and also hired external trainers to conduct such training on several occasions. All those activities helped improve the quality of organizational portfolio.

The microfinance program could impact the economic life of the borrowers in a very positive way. In addition to improvement of living conditions their family resource base gradually expanded with the increase in family income from investment of loan. Pidim made lot of effort to ensure that loan was utilized as per investment plan mentioned in the loan application. One of the conditions for repeat loan was borrower’s compliance of terms and conditions of previous loan, particularly with relation to ‘loan investment sector’. Utilization of loans in appropriate ‘investment sectors’ insured their return and making realization of loan more effective. In addition, Pidim sought ways and means to introduce proper accounting system for the borrowers. Many program participants developed farms and business enterprise from scratch. They however, don’t have proper accounts keeping system vital for long term sustainability of their business. Their practice of writing Tally Book or memory based data keeping system are very backdated and inefficient. Pidim started exploring the possibility of introduction of computer based accounting system for them. It would not only help the borrowers in their business, but at the same time make it possible to readily access business data and info for assessing the actual need of loan.

There were many other initiatives taken to facilitate operation of microfinance program. One of them was bringing all 50 branch offices of Pidim under computer automation by using g-Banker software owned by Grameen Communication, a sister concern of Grameen Bank. The software was built incrementally adding various features and options based on the feedback from the participating MFI. It was a great learning experience. The staff members working at different management levels now can access ‘real time’ data at any time as per their needs. This has greatly enhanced organizational capacity to manage microfinance program. The other important progress made was multi-sourcing of fund for lending operation. PKSF has been the principal provider of loan fund since the inception of the program. The burgeoning demand for loan by the borrowers and expansion of the program necessitated Pidim to contact schedule banks. It finally succeeded to borrow money from a number of banks for its microfinance program leveraging on time delivery of loan to Samity Members. As a result organizational portfolio increased considerably over a very short period of time. Finally, it can be said that Pidim has once again demonstrated its ability to successfully steer its microfinance program for achieving its cherished goals and objectives.