IV. Principle I: Prioritize Group Formation and Networking
IV. Principle I: Prioritize Group Formation and Networking
level, in the form of solidarity groups, and at the national and regional level in the form of
networking groups. Collective organization has several advantages in microfinance initiatives,
the foremost that they pool together human and material resources. In Africa, group organizing
has proven itself an effective strategy for MFI sustainability that Africans are especially
predisposed. Group formation for individual and community goals is a pre-existing,
"homogeneous" mode of organization in Africa that already operates in traditional financial
schemes and is readily adaptable to new microfinance initiatives. The group has proven
especially effective in the rural setting, where 80% of Africa's population reside (Box 1). The
relative isolation, small size, and common resources of villages engenders a mentality and
approach to problems that are seen as mutual rather than individual.
MFIs can utilize and support groups with regular meeting to reinforce group solidarity,
discipline, and consistent repayments. Groups are especially effective for educating and training
microfinance participants, enhancing networking and information dissemination. They are also
an important participatory tool that can reduce administrative cost by giving certain
responsibilities, such as loan monitoring, to the members themselves. Typically, small group size
is more effective to ensure that members genuinely know and trust each other.
Microfinance group members are typically more ready to take ownership for and support
microfinance initiatives. Mutual trust and peer pressure within savings and credit groups ensure
participation and repayment in microcredit programmes. The support and strength of a group
often raises community consciousness and creates a common infrastructure to solve problems
common to all, pooling local knowledge and resources for initiatives, such as bulk purchasing
and transportation, collective bargaining, and common infrastructure development – i.e. water
pumps, health care, and education schemes. Groups empower individuals to support each other
not just financially, but also emotionally. The group impresses upon members that they are not
alone or helpless, but can rely upon the support of their community, and cultivate self-esteem
through contributing to each other. This non-material benefit is an important resource, especially
during individual or collective crisis.
The benefits of organizing are not limited to the local group level, but can scale-up
through networking MFIs. Microfinance networks enhance MFI coordination, monitoring,
advocacy, and outreach. Networks allow MFIs to integrate approaches and better consolidate,
share, and disseminate human and productive resources, including technical, traditional, and
cultural knowledge. Such collaboration widens the group of stakeholders involved in the
microfinance dialogue, and provides a legitimate and accountable vehicle to lobby for State and
international actors to channel assistance. Access to these support structures available in
networking enables MFIs to benefit from economies of scale and scope, providing certain
services at lower institutional costs than otherwise possible. In some case it may be cost effective
for MFIs to outsource part of its operation to partner organizations more capable of efficiently
performing a service (i.e. establishing an information management system).
Microfinance in Africa: Combining the Best
Practices of Traditional and Modern
Microfinance Approaches towards
Poverty Eradication
IV Principle I Prioritize Group Formation and Networking - To learn more about this author, visit United Nations Economic Commission for Africa's Website.
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Collective and cooperative support is a critical microfinance strategy at both the local
level, in the form of solidarity groups, and at the national and regional level in the form of
networking groups. Collective organization has several advantages in microfinance initiatives,
the foremost that they pool together human and material resources. In Africa, group organizing
has proven itself an effective strategy for MFI sustainability that Africans are especially
predisposed. Group formation for individual and community goals is a pre-existing,
"homogeneous" mode of organization in Africa that already operates in traditional financial
schemes and is readily adaptable to new microfinance initiatives. The group has proven
especially effective in the rural setting, where 80% of Africa's population reside (Box 1). The
relative isolation, small size, and common resources of villages engenders a mentality and
approach to problems that are seen as mutual rather than individual.
MFIs can utilize and support groups with regular meeting to reinforce group solidarity,
discipline, and consistent repayments. Groups are especially effective for educating and training
microfinance participants, enhancing networking and information dissemination. They are also
an important participatory tool that can reduce administrative cost by giving certain
responsibilities, such as loan monitoring, to the members themselves. Typically, small group size
is more effective to ensure that members genuinely know and trust each other.
Microfinance group members are typically more ready to take ownership for and support
microfinance initiatives. Mutual trust and peer pressure within savings and credit groups ensure
participation and repayment in microcredit programmes. The support and strength of a group
often raises community consciousness and creates a common infrastructure to solve problems
common to all, pooling local knowledge and resources for initiatives, such as bulk purchasing
and transportation, collective bargaining, and common infrastructure development – i.e. water
pumps, health care, and education schemes. Groups empower individuals to support each other
not just financially, but also emotionally. The group impresses upon members that they are not
alone or helpless, but can rely upon the support of their community, and cultivate self-esteem
through contributing to each other. This non-material benefit is an important resource, especially
during individual or collective crisis.
The benefits of organizing are not limited to the local group level, but can scale-up
through networking MFIs. Microfinance networks enhance MFI coordination, monitoring,
advocacy, and outreach. Networks allow MFIs to integrate approaches and better consolidate,
share, and disseminate human and productive resources, including technical, traditional, and
cultural knowledge. Such collaboration widens the group of stakeholders involved in the
microfinance dialogue, and provides a legitimate and accountable vehicle to lobby for State and
international actors to channel assistance. Access to these support structures available in
networking enables MFIs to benefit from economies of scale and scope, providing certain
services at lower institutional costs than otherwise possible. In some case it may be cost effective
for MFIs to outsource part of its operation to partner organizations more capable of efficiently
performing a service (i.e. establishing an information management system).
Microfinance in Africa: Combining the Best
Practices of Traditional and Modern
Microfinance Approaches towards
Poverty Eradication
IV Principle I Prioritize Group Formation and Networking - To learn more about this author, visit United Nations Economic Commission for Africa's Website.
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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