Many MFIs have set up robust HR systems and practices over time; however other MFIs still need to invest in this area. Post the crisis, due to the RBI’s guidelines for NBFC‐MFIs to comply with (particularly the stipulated margin cap), MFIs are further constrained to reduce costs with obvious implications on costs of hiring, training and retaining human resources. While it is accepted that the most important cornerstone of responsible finance practice in microfinance sector is the HR practice, there is limited documented knowledge in this area.
HR is gaining importance and policies are being put in place. Medium MFIs are graduating to
the next level by setting up exclusive HR departments that focus on all aspects of HR. Larger
MFIs are taking the lead in benchmarking with other industries and are paving way for others
to follow. With a little support, the smaller ones would also be able to take up HR initiatives
in right earnest.
Treating employees in the same caring and transparent manner that the organization expects
clients to be treated will go a long way to improve the staff’s commitment to the institution
and reinforce the customer values the institution stands for.
Hence, a study on current human resource practices in MFIs in India, to document best practices that can enable replication/adaption, identify gaps, highlight challenges and provide recommendations on areas that need MFI as well as sector investment to bolster this agenda was thought of by ACCESS- ASSIST. They, with the support of IFC and SIDBI have instituted the study.