From Good to Great:

Nurturing a Value-
Centric Microfinance
Institution
Leadership Development
Workshop
Introduction
 Introduction

Experience One interesting thing

YOUR NAME
Designation
Session 1: Workshop objectives
and expectations
 Four pillars of the workshop

Pillar 1: Mission Alignment

Pillar 2: Organizational Values

Pillar 3: Managing Risk

Pillar 4: Social Performance Management

Session 2: Why do we exist?
 What is a mission statement
A succinct, clear declaration that reflects an organization's purpose, identity,
values, and the path to fulfilling its aspirations.
key Components

Purpose: Why the organization exists and its reason for

being.
Values: Core beliefs and principles that guide the
organization’s actions and decisions.

Identity: How the organization perceives itself and wishes to

be perceived by others.

Path: The approach or strategy the organization adopts to

achieve its aspirations..
Why is a mission statement
important?
• Direction: Provides a roadmap and guides strategic
planning.

• Alignment: Ensures all members are unified and

working towards common goals.

• Decision-making: Acts as a reference for making

consistent and aligned decisions.

• Motivation: PathInspires and provides a sense of

belonging among stakeholders.
 Sample mission statements

Google Microsoft Amazon Walt Disney company

To organize the To empower every To be Earth's most To entertain, inform and inspire
world's information person and every customer-centric company, people around the globe through
and make it organization on the where customers can find the power of unparalleled
universally accessible planet to achieve and discover anything they storytelling, reflecting the iconic
and useful. more. might want to buy online, brands, creative minds and
and endeavors to offer its innovative technologies that make
customers the lowest ours the world’s premier
possible prices. entertainment company.
 What do MFIs strive to achieve?
Empowerment of Underserved Communities

Providing Accessible and Affordable Financial Services

Facilitating Sustainable Economic Development

Promoting Financial Inclusion

Contributing to Poverty Alleviation

Institutional sustainability

What is the pathway to each of these

objectives?
 Sample mission statements

Grameen Bank Bangladesh: Accion

Accion is a global nonprofit committed to
Banking for the poor. Providing
creating a financially inclusive world, with a
comprehensive financial services to
pioneering legacy in microfinance and
empower the poor to realize their
fintech impact investing. We harness the
potential and to break out of the
power of digital technology to create a
vicious cycle of poverty.
financially inclusive world.
 Group exercise
Draft a mission statement for Prayas Financial Services
 What are core values
Core values are the Principles that guide an organization's behavior, decisions, and
actions, reflecting its beliefs and ethos.

Behavioral Stakeholder
Blueprint Relationships
They define the expected They shape how the
behaviors, interactions, and organization interacts with its
practices within the organization. internal and external
stakeholders, building a
distinct organizational culture
and reputation.

Decision-Making Sustainability & Ethics

Framework
Values provide a lens through which Values often encompass
strategic and operational decisions ethical considerations and
are made, ensuring they are in sync sustainability
with the organization’s purpose
 How do we communicate the core values?
Training and Development:
• Incorporate values into training programs and professional development.
• Develop workshops that explore the practical application of values in daily
operations.

Visual Reminders:
• Display the mission and values prominently in physical and digital spaces.
• Create visual assets (posters, wallpapers) that serve as constant reminders.

Client Interaction:
• Ensure that customer service and client interaction are aligned with organizational
values.
• Communicate the mission and values in client meetings and materials.

Events and Initiatives:

• Organize events, campaigns, or initiatives that are aligned with and promote your
mission and values.
• Engage stakeholders in activities that reflect your commitment to your values.
 How do we communicate the core values?
Onboarding Sessions:
• Introduce new employees to the mission and core values during orientation.
• Provide materials that explain the significance and application of these principles.

Internal Communications:
• Regularly communicate stories and updates that reflect the mission and values in newsletters,
emails, and intranet.
• Celebrate and acknowledge employees who exemplify the values.

Leadership Example:
• Leaders should embody and exemplify the mission and values in their actions and decisions.
• Engage leaders in discussions and forums about the mission and values.

External Communications:
• Integrate the mission and values into marketing materials, websites, and social media.
• Share stories and case studies that reflect the impact of your mission and values.
 Group exercise
In the given handout, there are a number of sample core values taken from several
organisations. These are only for reference purpose.

Each group has to identify 5 core values which you think are important for Prayas.
Rank them in order of importance.
Session 3: Stakeholders
 Who are the stakeholders

• Stakeholders refer to individuals, groups, or entities that have an interest,

concern, or stake in the operations and outcomes of a Microfinance Institution
(MFI).

• Engaging stakeholders effectively is crucial for sustaining operations, ensuring

compliance, and driving the social and financial impact of MFIs.

• Stakeholders influence and are influenced by the MFI’s policies, operations, and
performance.

• Effective stakeholder management aligns the MFI’s objectives with stakeholder

expectations and regulatory requirements.
Who are the main stakeholders in Microfinance and
what are their expectations?
Key stakeholders in Microfinance and their expectations

Clients
Accessible financial services,
transparent terms, and respectful
treatment.
Regulatory Bodies
Compliance with regulations, ethical
practices, and financial transparency
Employees
Fair employment practices,
professional development, and a
supportive work environment. Community
Positive social impact, community
development, and responsible
Investors: practices.
Financial returns, risk management,
and ethical investment utilization.
Session 4:Short-term Vs Long-
term decision
 Group exercise
Divide yourselves in to groups of 4.

Each group to analyse two case studies

Session 5: Risk Management
Framework
What is Risk?

• Risk is the possibility of an adverse event

occurring

• Risk Management is managing the loss from

that event happening to an acceptable limit
 Risk Management?

• Financial Institutions by their nature have to take risk; they cannot eliminate risk

Proactively managed

Not managed
Risk Matrix
Risk concepts
Can you list down the risks in an MFI?
 Risk categories
Credit Risk Liquidity Risk
Risk that our borrowers do Risk that we are not able to
not repay the loans which raise/manage funds required for
they have taken. our repayment obligations, for
meeting our expenses or for
planned expansion.

Operational Risk Market Risk

Risks arising out of frauds, Risks arising out of changes
failed processes or IT in market rates like interest
systems, breaches in internal rate or foreign exchange
controls or external factors. rates
 Risk governance structure

Board Of Directors CEO

Board Risk
Managing Management
Director Committee
(BRMC)
Management
Level Risk
Committee
(MLRC)
Risk Management Unit Internal Audit
All Departments Inputs Risk Champion/ Chief Inputs
Dept.
Head of Risk Officer
Head Internal
Departments
Risk ownership and Audit
Audit of policies and
assessment of achievements Management of:
V/s targets Social Performance Risk procedures
Credit Risk
Market Risk
Liquidity Risk
Interest rate risk
Operational risk
Session 6: Social Performance
Management
What is social performance

• Social Performance Management (SPM) in the

context of microfinance refers to the strategies
and practices that microfinance institutions
(MFIs) implement to realize their social
objectives.

• It derives from the mission of the MFI

• It involves managing and optimizing the social

benefits that MFIs aim to provide to their clients
and other stakeholders.
 Client Protection Principles
1. Appropriate Product Design and Delivery
Suitability: Ensure that products are designed to meet the needs of clients.
Affordability: Ensure that clients have the capacity to afford the products.
Transparency: Ensure that clients understand the products and terms.

2. Prevention of Over-Indebtedness
Assessment: Conduct thorough credit and repayment capacity assessments.
Limitation: Limit loan disbursements to amounts that clients can repay.

3. Transparency
Clear Communication: Provide clear, accurate, and transparent information about products and pricing.
Client Understanding: Ensure clients understand terms and conditions before transactions.

4. Responsible Pricing
Affordability: Ensure pricing is affordable and comparable to market rates.
Cost Transparency: Ensure all costs and fees are transparent and understood by clients.
 Client Protection Principles
5. Fair and Respectful Treatment of Clients
Dignity: Ensure clients are treated with respect and dignity.
Non-Discrimination: Ensure services are provided without discrimination.
Grievance Redressal: Implement mechanisms for clients to voice complaints and grievances.

6. Privacy of Client Data

Confidentiality: Ensure client data is kept confidential.
Security: Ensure client data is securely stored and managed.
Consent: Ensure client consent is obtained for data sharing.

7. Mechanisms for Complaint Resolution

Accessibility: Provide accessible channels for clients to submit complaints.
Resolution: Ensure timely and fair resolution of client complaints.
Feedback: Use client feedback for continuous improvement.
 Exercise
We will divide in 7 groups. Each group to discuss one aspects of Client Protection
Principles

For each CPP discuss

• What are the things which we are doing correctly?

• What are the things where we need to improve?
Session 7: Our relationship with
clients, staff and workplace
 Relationship with clients
What do we want?

• Happy and satisfied Clients

• Improvement in socio-economic status of clients
• Clients protected from frauds, mis-selling, and over-indebtedness

HOW DO WE MEASURE?
WHAT DO WE DO?
 Relationship with staff
What do we want?

• Happy and satisfied staff

• Capacitated staff
• Staff do not commit any frauds
• Staff are committed to organisation’s mission

HOW DO WE MEASURE?
WHAT DO WE DO?
 Relationship with workplace
What do we want?

• Safe and inviting workplace for the staff?

• Welcoming space for the clients
• Welcoming space for the outside stakeholders

HOW DO WE MEASURE?
WHAT DO WE DO?
Session 8: Making an Action Plan
 Exercise
Each department will make an action plan to ensure optimum status of Mission
Alignment, Dissemination of Core Values, and Risk management.

What are the things which your department needs to do

In the next 6 months In the next 12-18 months

Thank You
for participating