IN order to survive the test of time, there is the need for microfinance institutions to put qualified people to man strategic positions in their respective banks.
This was the assertion of Mr. Godwin Ehigiamusoe, managing director and chief executive officer of Lift above Poverty Organisation (Lapo). While speaking to BusinessWorld at a national workshop on commercial microfinance and savings mobilisation organised by the World Bank/Nigeria-MSME in collaboration with the Central Bank of Nigeria (CBN) in Lagos recently, Ehigiamusoe stated that the survival or failure of any microfinance institutions lies in the ability of the management in place.
He stressed that microfinance institutions should be able to institute a management that is ready to come out with very good strategy, something that reflect the business objectives of the institution.
To him, there should be a very high level of integrity, trust and emphasis on strategic thinking by the management in place. This, he indicated, would put the institution on the right part and avoid it from collapse.
Therefore, the leadership of MFBs must realise that they need to operate with trust to be able to get the needed credibility, he said. Lack of credibility, he noted, creates a kind of anxiety on the part of the customers and consequently led to lack of trust which could impede the bilateral relationship between its customers and the bank.
According to him, “The whole management of MFBs must be able to define the direction and being able to be responsible for what is happening in such institution either good or bad. It is necessary so that they are able to grow in a very sustainable manner and they will not have any problem.”
While speaking on the recent development whereby some microfinance banks are closing down, the Lapo boss, who also runs a MFB, stated that most of these institutions were poor performing community banks, adding that, the fact that these institutions changed their names from community banks to microfinance banks does not means their attitude have changed.
He stated that lack of skilled personnel in the MFIs nationwide contributed to illiquidity in most of these institutions, as most of them do not posses good microfinance banking training.
In a situation whereby somebody is running MFBs like commercial banks is detriment to the system and that is what we are witnessing today, he said.
As microfinance organisation grows from introduction stage to maturity, he said emphasis will increasingly be on management development. Key issues as strategic planning, process and product development, human resources planning and development, financial planning among others, will continue to define the practice and success of the industry, he reasoned.
He called on MFBs on their own part to train their staff on the rudiments of microfinance so that they can operate effectively and efficiently in the industry. Management capacity is the key to the success of microfinance outfits and MFBs must build skills in their staffs, he warned.
He called for appropriate training intervention as it is critical to effective savings mobilisation in MFBs. The capacity building, he said, should be integrated into the institutional human resource development frame-work.