The envisaged training program aims at enhancing the capacity of various MFI Managers, consultants and other interested parties, by equipping them with the appropriate Microfinance management and supervision tools and skills.
The Need for the envisaged Training Program
Most Micro Enterprises as well as workers in the informal sector have increasingly looked to Microfinance institutions in recent years to meet their needs. Nevertheless, Some MFIs in Tanzania are not meeting their full potential. Others (such as DECI) have gone to the extent of abusing the opportunity. A number of factors have been identified as holding back their development. These include:-
• Low capitalisation levels,
• A limited range of products and services,
• Poor outreach,
• Lack of appropriate MFI Business management skills and
• Sheer misconduct
Some MFIs suffer from weak internal control systems, poor governance, incompetent management and weak leadership, resulting into high loan delinquency rates among other things.
The envisaged Training Program thus aims at addressing the above deficiency by enhancing the capacity of MFI executives, consultants and practitioners and enable them undertake their respective responsibilities more efficiently for the sustainability of their respective institutions
Objectives of the Training Program
The main objective is to fill the knowledge vacuum experienced in various Microfinance Institutions by making the respective executives and consultants to:
• Acquire sufficient knowledge about issues related to presentation of MFIs’ financial statements and financial analysis, leading to proper interpretation of the statements.
• Understand and apply the credit management and procedures appropriate to their respective institutions as well as financing for their own organizations
• Understanding the importance and process of developing business plans for their respective organizations as well as their clients
• Acquiring Marketing skills
• Acquire practical knowledge and apply it in solving practical problems in their organization or for their clients.
Description of the Program
The training will be conducted on full-time, residential basis in groups not exceeding 40 participants per intake. Every intake shall run for 4 days. The number and frequency of intakes will be determined by the demand (number of applicants). The plan is to conduct one training intake in each of the Eastern, Southern, Southern Highlands, Northern, Western, Lake and Central zones as well as Zanzibar.
Coverage of the Training
The training will cover Four Modules as follows:
Module 1: Marketing (More than just making a sale)
Success of any business in the current situation requires an enterprise to produce and sell what the customer or client needs. This module will therefore introduce the participants to effective marketing principles and practices, including various marketing tools and strategies.
Module 2: Financial Management and Analysis for Microfinance Institutions
Many decisions made in the day-to-day operations of organizations need precise and accurate financial information that is generated from accounting records. Proper accounting records are therefore a precondition for effective decision-making in any organization. Microfinance Institutions, including the SACCOS are unique entities in which their income is to a large extent dependent on loan interest. They thus require tailored accounting systems to enable them to track pertinent issues for better performance of their lending operations. This training module is geared towards meeting that need.
Module 3: Accessing Capital and Managing Credit for Microfinance Institutions
The survival of a Microfinance institution is dependent on its ability to mobilize capital (through capital, savings, loans, grants, etc) and then make business out of them in the form of lending. Savings form part of the MFIs (especially SACCOs) liabilities which attract minimum costs as compared to other liabilities like loans from banks.
Lending on the other hand constitute the major line of business of the MFIs. It is through the issuance of loans that the institutions make money. Improper or ineffective management of these two aspects (Capital mobilization and lending) tends to be detrimental to the organization. This module is thus meant to equip the participants with among other things, techniques of planning and controlling the cost of capital; managing and monitoring the loan portfolio, including prevention and management of delinquency, as well as determining and application of effective interest rates
Module 4: Developing a Business Plan
A good business plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business. Writing a good business plan can’t guarantee success, but it can go a long way toward reducing the odds of failure.
Operating a business without a plan is like going to a supermarket without a shopping list and trying to remember all the items that are needed. One comes out of the supermarket having forgotten something critical - and having purchased a number of items that are hardly required and may never be used. It is the same for a business operating without a plan. Critical issues do not get addressed - and some tasks get done that have no relationship to the direction the business needs to go. For a business, however, the consequences of these unaddressed issues can range from inconvenience to bankruptcy.
This module therefore aims at training participants to:
• Understand the concepts of strategic and business planning and their importance as a management tool and be able to link them to planning for their Enterprises as well as their clients.
• Write mission and vision statements, establish goals (for their institutions and their own selves);
• Conduct situational analysis and understand their business environments;
• Distinguish between internally or externally focused business plans
• Develop strategies for planning as well as implementation;
• Determine appropriate resources for the success of the plan
Training Methodology
Training will be conducted in a participatory manner through hands on and experience sharing techniques that will allow constant interaction between participants and facilitators. The sessions will be delivered by two co-facilitators and the specific methods are described under each training module. However, each training module makes use of the general approach that incorporates adult learning techniques and is summarised in the following figure.
