Design Phase Executive Summary 9 May 2002 DESIGN PHASE EXECUTIVE SUMMARY MAY 2002.

Design Phase Executive Summary

9 May 2002

DESIGN PHASE EXECUTIVE DESIGN PHASE EXECUTIVE SUMMARYSUMMARY

MAY 2002MAY 2002

2

Agenda

Agenda Item Resp. Time

1. Project Approach Wendy Pienaar 5 min

2. Lender and Consumer Survey Summary Wendy Pienaar 5 min

3. Business Development Support Assignment Alicia Greenwood 15 min

4. Curriculum Framework Assignment Brent Davids 15 min

5. Selection Assignment Wendy Pienaar 5 min

6. The Way Forward Wendy Pienaar 5 min

7. Breakout Instructions Heather Watson 5 min

Note: slides represent Accenture's recommendations based on findings from research and stakeholder consultation

3

Overview of Design Phase AssignmentsOver a period of approximately 9 weeks, the project team has been tasked with 3 assignments

The project team has adopted a consultative approach involving as many stakeholders as possible

The project team has adopted a consultative approach involving as many stakeholders as possible

Assignments Assignment Description

Curriculum Development Assignment

Develop a Stakeholder Capacity Plan to increase awareness, interest and understanding of skills development legislation and this project

Identify core and generic skill needs of micro-financiers and borrowers Develop a Curriculum Framework Create an Implementation Plan for curriculum framework Establish Curriculum and Consultative Forums

Business Development Support Assignment

Develop BDS Consultation Reports Identify existing BDS programmmes Review of Best Practices Develop a BDS Strategy

Selection Process Assignment

Develop Selection Criteria and Selection Processes (micro financiers, borrowers) Develop a Profile for training providers Develop Contract Outlines for micro financiers and training providers to be involved in

the process going forward

4

Agenda









5

Lender Survey Methodology

Clarify the key behaviours and skills required for the micro finance industry Identify key skills gaps and approaches to close these gaps Identify areas of priority training requirements Provide the basis for more detailed skills and competency framework development

Aim

Approach

Sample of respondents obtained

Web-based survey and back-enddatabase created

Response rate strategy formulated

Survey live from 2 to 10 April (8 days) Reports drawn

from database and data analysis conducted

Assessment tools evaluated Web-based survey

Survey questions formulated English and Afrikaans Targeted audience telephoned

and sent e-mail reminders

Approach

6

Respondents Demographics

Educational Level %

Secondary School (Matric) 32.7

Secondary School (Other) 5.4

College 11.9

Technikon 13.4

University 21.3

University / Technikon Post Graduate

15.3

Race Groups %Asian 0.5

Black 4.4

Coloured 2.9

White 92.2

Gender % Male 79

Female 21

Respondents were predominately managers/ownersRespondents were predominately managers/owners

The majority of the survey respondents were white males (79.4%) Almost a third of the respondents had at least a matric level of education (32.7%) More than a third of the respondents (36.6%) had received undergraduate and postgraduate

qualifications Asians, Blacks and Coloureds made up 7.8% of the total population

A response rate of between 14% - 25% was obtained for the different survey areas. As expected, the majority of respondents were male, white and had at least a matric or more

7

Organisation Type

Type of Organisation # Resp % of Resp Average # Branches

Short-term micro financier 166 82.4 11

Long-term micro financier 17 8.3 6

Banks - - -

NGO 5 2.5 4

RFI 6 2.9 2

Retailer 1 0.6 1

Housing 7 3.4 5

Total 204 100% n/a

Additional surveys were sent to type of organisations that did not have a high response rate

Additional surveys were sent to type of organisations that did not have a high response rate

The majority of respondents were from short-term micro financiers and numbered 166 in total The number of branches ranged from 1 to a maximum of 120 with an average of 5 branches for all micro

financierss None of the banks responded to the survey, despite having been included in the survey sample

Short-term micro-financiers made up the majority of the respondents

Type of Organisation

8

Operating Model

Success for micro financiers is largely attributed to combining effective management with well trained staff,offering good service

Success for micro financiers is largely attributed to combining effective management with well trained staff,offering good service

Success Factors Biggest Challenges

Top 5 reasons for success in the industry

1. Trained staff

2. Good service

3. Effective credit control

4. Committed management

5. Personal relationships built on trust

Top 5 challenges faced by micro financiers

1. Card & PIN used for collateral

2. Regulation of entire industry

3. Debt recovery

4. Education of clients

5. Minimisation of bad debt

The biggest reason for success was stated as having well trained staff, whilst the biggest challenge was not being able to retain customer’s cards & PIN’s

9

Training Analysis

On the whole, current training approaches do not appear to be very effective On the whole, current training approaches do not appear to be very effective

Less than a third of respondents currently run training programmes while less than half of respondents indicated that they plan to implement training in the future

Formal Training Programs

Current

Micro financiers using formal training programmes

Yes

30.58 %

No

69.41 %

Future

Micro financiers planning to implement training programmes

Yes

41.97 %

No

58.02 %

Approach to Training

Training approach used Very effective

Effective Somewhat effective

Not effective

Classroom training 8.33 % 19.04 % 14.28 % 46.42 %

Distance learning 2.8 % 16.90 % 21 % 59.10 %

Coaching 16.57 % 21.90 % 4.1 % 27.39 %

Mentoring programmes 14.51 % 19.35 % 11.29 % 70.96 %

10

Business Development Support

Future BDS initiatives should be centred around strategic business management and should be available through multiple distribution channels for maximum

exposure

Future BDS initiatives should be centred around strategic business management and should be available through multiple distribution channels for maximum

exposure

Marketing / industry Information is cited as the number one requirement for future BDS initiatives

Future BDS initiatives

The top priorities and requirements for

future business development support

initiatives are:

%

1. Marketing / industry information

2. Business process improvements

3. Business planning

4. Business analysis

5. Management reporting

6. Financial / accounting

7. Administration

8. HR / staff planning

9. Internal auditing

10. Network / referrals

11. Technology assistance

78

74

74

74

57

51

43

43

39

31

8

BDS Delivery Mechanisms

The most popular methods of delivering

business development support are

through:

%

1. Telephonic advice

2. Advice centres

3. Classroom training

4. On-the-job

5. Seminars

6. Training via email

7. Mentoring

8. Training via the internet

28

25

23

17

13

11

1

0

11

Skills Methodology

Response Original

ScaleNew Scale

Level of Importance

0 = not applicable

1 = not important

2 = important

3 = very important

4 = critical

0% = not applicable

25% = not important

50% = important

75% = very important

100% = critical

Skill Level

0 = no experience

1 = beginner

2 = skilled

3 = expert

0% = no experience

33% = beginner

67% = skilled

100% = expert

Training Received

Yes/No % ‘Yes’

For ease of interpretation and comparison, the original survey point scales were normalised to a 100% scale

• ‘Level of Importance’ was answered on a scale from 0 to 4. This score was divided by 4 and converted to a %

• ‘Skill Level’ was answered on a scale from 0 to 3. This score was divided by 3 and converted to a %

• ‘Training Received’ – all ‘Yes’ responses were added and converted to a percentage of total responses

0102030405060708090

100

Pe

rce

nt

Training

Importance

Skill Level

Very importantSkilled

Important

BeginnerNot important

Not applicable/no experience

Critical/expert

Skill

Skill Area

12

Summary -Management Skill Areas

Risk management is perceived to be the most important skill area by micro financiers

High importance areas with low skill levels and a low % of trained respondents should be high priority areas for future training initiatives

High importance areas with low skill levels and a low % of trained respondents should be high priority areas for future training initiatives

• The top 5 areas of importance are ‘risk management’, ‘loan book management’, ‘client service’, ‘legal and regulatory compliance’ and ‘cash management’

• SMME lending is seen as the least important skill area by micro financiers, possibly because so few micro financiers lend to SMMEs

• It is not surprising to see risk and loan book management as the top skill areas

• The importance of client service may be driven by the highly competitive industry and the need to acquire and retain customers

• The r-squared of training vs. skill level is 0.58 indicating that 58% of the variation in skill levels is attributable to the number of respondents who have received training, whilst the other 42% of the variation is determined by other factors (for example: experience)

Importance (%) Skill Level (%) % Received Training

Summary of Skill Areas

0

10

20

30

40

50

60

70

80

90

100

Risk M

anag

emen

t

Loan

Boo

k Man

agem

ent

Client

Ser

vice

Lega

l & R

egula

tory

Com

plian

ce

Cash

Man

agem

ent

Financ

e

Fundin

g Stra

tegie

s

Busine

ss S

trate

gy

Client

Adm

inistr

ation

Staff

Man

agem

ent

Compla

int P

roce

dure

s

Servic

e Pro

vider

s

Mar

ketin

g

SMM

E

Per

cen

t

13

Skills – Risk Management

The overall importance of risk management is 84% whilst the reported skill levels average 64% and 21% of respondents have received training in this area

There appears to be a need for training in fraud management and client credit limits

There appears to be a need for training in fraud management and client credit limits

Overall, risk management is rated as the most important skill area by micro financiers

The importance of the four risk management skills were similarly rated by micro financiers (83%-87%), as were the levels of expertise (61%-68%)

The fewest respondents had received training in fraud management (16%)

Most respondents had received training in ‘risk and return analysis’ (24%)

Client credit limits are an important skill, as this limits the danger of borrowers becoming over-indebted and unable to repay their loans. The training received in this area is 21% and suggests a priority area for trainingImportance (%) Skill Level (%) % Received Training

Risk Management

0

10

20

30

40

50

60

70

80

90

100

Fraud Management

Risk Management

Risk and Return Analysis

Client Credit Limits

Per

cen

t\

87

63 61

84 83

62

83

68

14

Consumer Survey Methodology

To identify the learner needs of consumer borrowers in the micro finance industry in South Africa To determine the most suitable methods for improving basic money-management skills and making borrowers aware of

various issues in the industry To determine whether significant differences for learning requirements exist between borrowers in different provinces

Aim

Approach

Willie Oosthuizen contacted 5 micro lenders in each major city

around the country

Survey conducted Thursday28th March

and Tuesday 2 April

373 borrowers’ responses

were obtained and collated

Wise Staffing was used to conduct field research

Cokes were offered as incentivesto maximise response rates

Approach

15

Summary of Findings

1. 74% of all respondents can read English, a finding consistent across the provinces

2. 76% of all respondents watch SABC TV, 37% listen to Radio Metro and 22% read Drum magazine, all of which are national media

3. In addition to the commercial media, notice boards [47%], pamphlets [45%], posters [33%] and unions [51%] are the most common communication methods used by borrowers across the nation

4. Newspaper [35%] and radio [30%] are the preferred means of communication across the provinces (except in Cape Town where computers were more favourable than radio)

5. 42% of borrowers are aware of their admin fees, 28% compare costs between micro lenders, and 76% would like help with budgeting

6. Most people use loans for recurring expenses (transport [38%], food [38%], education [35%] and funerals [32%])

7. The main reasons borrowers use micro financiers are speed, simplicity and because thr borrowers failed to meet banks’ requirements

8. Borrowers are generally not aware of all their rights, a finding consistent across all the provincers

16

Communication Method

LanguageCape

TownJoburg Bloem Durban PE

Sample Size (n) 145 109 58 40 21

Newspaper 52% 37% 12% 15% 5%

Radio 4% 67% 12% 48% 33%

Computer 23% - - - -

Television 6% 1% - 28% -

Pamphlets - - 14% 3% -

Newspaper [35%] and radio [30%] are the preferred means of communication across the provinces (except in Cape Town where computers were more favourable than radio)

The Sowetan and the Argus would reach a large percentage of the population and is a practical means of delivery (newspapers are cheap and can be kept). Radio Metro would

also reach a large audience, although listening times have not been tested

The Sowetan and the Argus would reach a large percentage of the population and is a practical means of delivery (newspapers are cheap and can be kept). Radio Metro would

also reach a large audience, although listening times have not been tested

Commercial Communication Media Preference – Total Sample

TV

Newspaper

Radio

Pamphlets

Computer

• Although many respondents watch TV (at least 76%) it is not a preferred communication methodThis could be due to respondents watching at irregular intervals, or perhaps not owning their own televisions and only watching

at work• The response rate in Bloemfontein was low for all media possibly because respondents did not understand the questions• Pamphlets do not appear to be an effective means of communicating with borrowers

This finding may be due to people not knowing where to get pamphlets from, or the irregularity in the distribution of information pamphlets

17

Loan Knowledge & Budgeting

ResponseCape

TownJoburg Bloem Durban PE

Sample Size (n) 145 109 58 40 21

I know how much interest I pay

91% 81% 55% 75% 95%

I know how much my admin fees are

47% 39% 57% 28% -

I compare costs between Micro financiers

19% 42% 16% 30% 52%

I know how to budget 92% 75% 74% 60% 90%

I want help with budgeting

86% 70% 74% 53% 86%

42% of borrowers are aware of their admin fees, 28% compare costs between micro lenders, and 76% would like help with budgeting

Micro financiers need to make admin fees explicit, and borrowers need communication about shopping around for the best deal and how to budget their finances

Micro financiers need to make admin fees explicit, and borrowers need communication about shopping around for the best deal and how to budget their finances

81%

42%

28%

81%76%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

InterestAmount

Admin Fees

CompareCosts

BudgetAbility

Budget Help

% of All Respondents Replying “Yes”

• Only 42% of respondents were aware of the admin charges on their loans• Only 28% of all respondents compared costs between micro financiers• It is interesting that 81% of borrowers said they knew how to prepare a budget, yet 76% said they would like information about how to

budget their financesThis could possibly be attributed to the fact that they do not actually know how to budget, or what a budget really is

18

Loan UsageMost borrowers use loans for recurring expenses (transport & food [38%], education [35%] and funerals [32%])

Borrowers need communication on how to calculate their recurring monthly expenses and to save enough money each month in order to avoid the debt spiral. Borrowers also need

information on how bank loans work and what is required to obtain a bank loan

Borrowers need communication on how to calculate their recurring monthly expenses and to save enough money each month in order to avoid the debt spiral. Borrowers also need

information on how bank loans work and what is required to obtain a bank loan

Why do you use a Micro financier and not a bank?Total

Sample

Sample Size (n) 373

It is easier than using a bank 35%

It takes less time to approve a loan than at a bank 20%

I do not meet the requirements for a bank loan 17%

I don’t know how bank loans work 4%

It is cheaper [interest] than the banks 4%

I am blacklisted and can’t get a loan at the bank 2%

Loan Use - Total Sample

Transport

Food

Education

Funerals

Furniture

Clothing

Medical Expenses

Home Extensions

Pay off other loans

Business Use

Recreation & Sport Agriculture

• Most respondents felt that micro financiers are quicker and easier than banks Many borrowers said they need money in a hurry, therefore micro financiers are the lenders of choice for them

Only 17% of borrowers used micro financiers because they didn’t qualify for a bank loan – most respondents therefore prefer micro financiers for reasons of convenience

• These findings showed no significant differences across the provinces

19

Knowledge of Borrower Rights

Borrower Rights Cape Town* Joburg Bloem Durban PE

Sample Size (n) 145 109 58 40 21

I know I have 3 days to cancel my loan 3% 49% 43% 63% 19%

I know I should get a copy of the loan agreement 94% 85% 76% 58% 81%

I know I must not sign any blank documents 5% 91% 69% 68% 81%

I know my lender must not keep my bank card, PIN or ID doc

96% 25% 34% 58% 33%

I know I can settle my term early 10% 82% 62% 50% 86%

I know what happens when I’m blacklisted 98% 92% 71% 90% 95%

I know I must not borrow more half my salary 90% 75% 62% 65% 90%

I know I can be placed under administration 85% 18% 21% 38% 33%

There are a number of rights that borrowers are not aware of, a finding consistent across all the provinces

The ultimate target is for all borrowers to know about all their rights through preffered media

The ultimate target is for all borrowers to know about all their rights through preffered media

• Most borrowers have little knowledge about their rights, specifically: 3 days to cancel a loan signing of blank documents (Cape Town only 5% were aware) retention of bank cards, PIN #’s and ID documents early settlement administration

Despite fairly wide knowledge of some rights, all rights need to be communicated to all borrowers in order to increase awareness

* The results for Cape Town were surprisingly high. A possible reason is that the question was incorrectly asked by the interviewers or interpreted incorrectly by borrowers

20

Agenda









21

Focus of BDS assignmentThe business development support (BDS) section researches the most appropriate opportunities for delivering BDS to micro financiers in South Africa

Only some of the key findings have been included for today’s sessionOnly some of the key findings have been included for today’s session

Report Definition Approach

Consultation report

BDS ideas in the South African context

Consulted with sample of stakeholders around learner support mechanisms

Included stakholders who are:

Donor-funded vs. private businesses

Operating in isolated centres vs. those who have national reach

Micro finance specific vs. general business

BDS review report

An assessment of certain current BDS initiatives in South Africa

Interviewed sample of stakeholders providing BDS in South Africa

Assessed BDS content and delivery mechanisms

Assessed relevance to micro financiers

Best practice BDS report

Report detailing best practices, guiding principles and lessons learnt as identified from existing BDS initiatives worldwide

Reviewed and assessed worldwide BDS case studies

Included studies from range of countries (mostly ‘3rd world’ countries)

Researched worldwide BDS best practice and guiding principles

Included BDS success factors, as well as barriers to success

BDS strategy Recommendation for a strategy to establish a BDS initiative aimed at micro financiers in South Africa

Considered global best practices and lessons learnt Utlised current South African initiatives were applicable Identified key decisions to be made regarding recommendation Identified next steps required to pursue recommendation

22

What is BDS?BDS refers to the provision of information, knowledge, skills and advice on the various aspects of a business.

Providers

Services

Needs

Micro financiers

Inspection & testing

Accounting / auditing

Technical information

Consultancy

Training

Finance

Courier delivery

Web-site design &

mgmt.

Legal servicesComputer

services

Repair / maintenance

Technology Personnel

LinkagesLaws /

Regulations

Transport

Administration

Production

Security

Business space

Markets

Banks

NationalGovt.

Universities / Colleges

NGOs

Associations

Clubs

Finance companies

Consultants

Accountants

LocalGovt.

Parastatals

FamilyFriends

Customers

Business Networks

• Includes all external non-financial support to enterprises that

• Increases operational capacity• Provides access to markets• Improves management skills• Improves financial efficiency • Provides access to networks and

information

• Examples of BDS services include:• Training / skills development• Legal services• Accounting / auditing• Advertising• Network brokering• Business consultancy• etc.

Ref: Microenterprise Best Practices, Development Alternatives Inc, 1999

Accounting

23

BDS Success Criteria

1. BDS services must be demand-driven Ensures a greater, more positive impact, and encourages clients to pay for the services they value

2. BDS services must be provided to the right clientele The main objective of a BDS is to facilitate growth, profitability and competitiveness of SMMEs. The

BDS must therefore be provided to SMMEs who exhibit good entrepreneurial characteristics and can make good use of the services

3. The SMME community must have a strong sense of ownership in the BDS The best business providers generally work in the environment, resulting in commitment and strong

ownership

4. The BDS centre must achieve maximum outreach Maximum impact can be achieved by strengthening private sector service providers, creating better

networks between service providers, and promoting informal systems of learning

5. The BDS centre and its service providers must achieve financial sustainability The institutional and financial sustainability must be achieved by controlling costs to maintain

competitive and to increase profits

Best practice research indicates that successful BDS initiatives understand the markets they serve and provide demand-driven services

24

Barriers to BDS Success

Not charging for services often results in poor commitment from the users There must be a balance between free and paid-for services

Relying solely on private market finance can be detrimental Businesses may be reluctant to incur the costs of setting up BDS initiatives, as their competitors may be just

as likely to benefit Provides a rationale for donor support justified on a cost-benefit basis, rather than on the return on

investment that individual businesses usually make

Support services are often too generalised Often supply-driven and delivered in a top-down fashion, rather than from a SMME demand perspective Training should be business-oriented, and not viewed as an extension of the basic general educational

system

Support services are sometimes not accessible by the target users Must be delivered via a suitable, convenient medium

Provision of BDS can be complicated and some international initiatives have not been successful

25

Overview of BDS Initiatives

There are many BDS initiatives targeting SMMEs in general Different delivery mechanisms are used Different levels of information are provided Different levels of support are provided In some cases, shared services are provided Both donor-funded and self-sustainable models are used

Strengths: Large volumes of general business information are available A large amount of support is available A large network of service providers is in place across the country A web-based BDS initiative is being successfully run

Lessons learnt: Require sector-specific expertise and support Face-to-face approach is very successful Charging for services results in more buy-in and commitment from users Closer interaction with affiliates required Limited resources for industry research Poor client satisfaction / client impact assessment processes

An assessment of a sample set of SA BDS initiatives illustrated that excellent progress has been made in supporting SMMEs

26

Rating of SA BDS InitiativesA comparison of some SA initiatives illustrate a wide variety of capabilities and reach

Relevance of content to Micro

financiers

Na

ture

of

BD

S s

up

po

rt

Micro finance-specific content

General business content

Shared services

Info only

Support services

Mastermind Alliance

MEA

Business Beat

Ntsika

Brain

Business Place

Khula

Brain Affiliates / Ntsika LBSCs

Reach

De

liv

ery

me

ch

an

ism

sNational coverage

Single location

Telephone

In-person

Internet

Mastermind Alliance

MEA

Business Beat Ntsika

Brain

Business PlaceKhula

Brain Affiliates / Ntsika LBSCs

There are very few BDS initiatives which specifically target micro financiers

There are very few BDS initiatives which specifically target micro financiers

27

BDS Delivery MediaHighest priority should be given to those BDS delivery media which can be accessed by the majority of the target audience

Ease of delivery

Siz

e o

f ta

rge

t a

ud

ien

ce

HighLow

Large

Small

Mentoring

Telephone

Radio

One-on-one’s

Videos

TV

Roadshows

Internet

Newsletters

• Cost to design, develop and implement• Time to design, develop and implement

• Technological capability of MFs

• Geographic location of MFs (urban / rural)

Large no. of users accessed, with low implementation effort

CDseMail

28

BUSINESS DEVELOPMENT SUPPORT

SERVICE PROVIDER (SP) NETWORK

BDS Delivery SolutionSupporting the internet/call centre portal with an ‘on-the-ground’ service provider network will ensure that the needs of the entire target audience are catered for

Variety of information sources, catalogues and

library items

BDS RESOURCE CENTRE

Basic Information And Advice Specific Information And Support

MICRO FINANCIERS

Call centre

Internet Portal

29

BDS Delivery SolutionThe revenue model supporting the BDS delivery solution is dependent on the types of services and information it will eventually provide

A business case must be developed and agreed to ascertain the full financial benefits of setting up the BDS initiave

A business case must be developed and agreed to ascertain the full financial benefits of setting up the BDS initiave

Sources Of Revenue

Services

Information

Research

Shared Services

Access to portalAccreditation

of SPs

e.g. Best practice analysis

e.g. Training manuals

e.g. Internal audits

e.g. Access to restricted information

e.g. SPs pay for accredited status / Franchising of SPs

e.g. Outsourcing of payroll function

30

Options for BDS Delivery Solution

Option 1 Option 2 Option 3

BDS resource centre only Service provider network only BDS resource centre

and SP network

Advantages Easy to develop and manage Supports MFs who have minimal

technical capability (telephone is minimum requirement)

24 x 7 availability Few players involved, therefore low

political impact Latest, up-to-date information Relatively cheap

Supports MFs who have minimal / no technical capability

Contributes to development of local SMMEs, and of the community

SPs provide sector / community specific research

Caters to full spectrum of MFs (low – hi tech)

Continous feedback loop re. support, training and services needs

SPs provide sector / community specific research

BDS resource centre supports SPs Contributes to development of local

SMMEs, and of the community 24 x 7 availability

Disadvantages No network of SPs for walk-in clients (rural areas)

No community or sector-specific information is easily accessible

Selection of credible SPs may be difficult Information and skills may be dated No central information support for SPs Complicated management of SPs 8 – 5 availability

Many political players involved Governance structure may be

complicated Selection and management of SPs

may be complicated

Recommendation

The BDS model can either be implemented as an end-to-end solution, or the various components can be implemented independently

A full implementation is recommended to ensure efficient support for the MFs and the SPs, and for superior information provision

A full implementation is recommended to ensure efficient support for the MFs and the SPs, and for superior information provision

31

INFORMATION

Role of the BDS CentreThe BDS centre will be a hub for all information relating to the microfinancing industry, and will coordinate activities between the micro financiers and the service providers

Online access

Phone / fax

BDS centreMF = Microfinancier* Best practice

BACK-OFFICEFRONT-OFFICE

InternetPortal

Call Centre

MF-specific information *

Access to electronic databases

Training catalogues

General business

information

Library of books, CDs,

videos

Links to intl. contacts

ACTIVITIES

Portal maintenance

Accreditation of SPs

Marketing

Coordinate events / training

Coordinate client feedback

Online chatrooms

Newsletters

Monitoring of SPs

Client database

Research

Social responsibility

32

Roleplayers: BDS CentreCurrently in SA, no organisation offers the full range of capabilities required to run the proposed BDS centre, although a number of players play in different areas

Call Centre / Internet Portal

BRAIN Call centre Internet portal Both managed and maintained by BRAIN

Information

Providers

Local resources: e.g. MFRC, MEA, MLA

Micro financier-specific information Not available online

International resources: e.g. CGAP, ILO, etc.

Online source of micro financier-specific information

BRAIN Online databases Links to general business information (280 links) No micro financier-specific information

BANKSETA Micro financier training curriculum and material

Willie Oosthuizen (Mastermind Alliance)

Micro finance manual - book and CD Currently designing an internet portal

Ebony Consulting etc. Micro financier training curriculum and material

33

SERVICES

Role of the Service ProvidersThe SPs should be sustainable businesses, and will be accredited and monitored by the BDS centre

Walk-in clients

BDS Referrals

Affiliated Service Provider

Office based in city or town, across SA*

Conduct training

Provide services

(charge / free)*

Mentoring / counselling

Business Incubator

Business linkages

Community-specific market

research*

Workshops

Shared services

(e.g. payroll)

ACTIVITIES

Provide feedback to BDS*

Manage events programs

Conduct local research*

Manage training programs

Assess client needs*

Market within community

Leverage BDS information

* Best practice

Accreditation to be based on various criteria e.g. service offered, service delivery track record / credibility, cost of delivery, geographical reach, etc.

“Accredited status” to be reviewed annually, or as required

34

Roleplayers: Service ProvidersThere are many service providers located around South Africa, providing a diverse range of services

SERVICE PROVIDERS

Local Business Service Centres (LBSCs) Accredited by Ntsika Diverse range of operations, services and size of

organisations Minimal reporting responsibility to Ntsika Many have poor reputation in marketplace

BRAIN affiliate members Accredited by BRAIN Main accreditation criteria are:

– Must have internet capability– Must have existing client base

No rigorous monitoring by BRAIN No reporting responsibility to BRAIN

Business Beat service providers Managed by a formal reporting process

Many other examples exist: The Business Place, Mastermind Alliance, Ebony Consulting etc.

To ensure credibility and sustainability, very specific accreditaion criteria must be enforced on the SPs providing services to micro financiers

To ensure credibility and sustainability, very specific accreditaion criteria must be enforced on the SPs providing services to micro financiers

35

BDS CENTRE

Role of the Micro FinancierThe MFs will experience a ‘pull’ and ‘push’ of information from the various resources

Micro financiers – Urban and RuralMF = Micro financier* Best practice

LOCAL SP

Receive in-person training

Receive specific local research

‘Walk-in’ for assistance

Receive shared services

Go on site visits

Receive newsletters via email / post

Receive informationvia email / post

Chat online

Conduct online training / research

Browse portal for updates

Walk-in

Internet

Phone

Fax

Provide feedback*

Internet

Many different incentive schemes exist to encourage MFs to use all the resources available

Receive incentives

Receive incentives

36

Approach to Tiered Rollout

Establish BDS resource centre

Establish

1st tier Service Providers

Establish

2nd tier Service Providers

Establish

3rd tier Service Providers

Cape Town

Durban

Port Elizabeth

Pretoria

Bloemfontein

Johannesburg

East London

Pietersburg

Upington

Beaufort West

KEY

BDS Resource Centre

1st Tier SPs

2nd Tier SPs

3rd Tier SPs

4 months 3 months 3 months 3 months

Nelspruit

???

Pre-project

decisions

PHASE 1 PHASE 2 PHASE 3 PHASE 4

(Phases 1 and 2 could be conducted in parallel)

37

Challenges to implementing BDS ModelComprehensive design of processes and of roles and responsibilities is required to ensure efficient operation of the BDS initiative

Challenges Actions

Resource centre employees must be adequately skilled

Recruit call centre operators with micro finance industry experience

Defining a satisfactory business case for the BDS model

Identify the revenue model, sources of income and sources of costs of the initiative

Existing information must be taken into account Identify and assess existing information

Identify gaps in existing information

Micro financiers must be adequately incentivised to utilise the portal

Interview micro financiers to assess most suitable form of incentivisation

Service providers and affiliates must be credible and trusted in the community

Define and communicate management and accreditation of affiliates processes

Agreement has to be reached between all the involved parties prior to development of a support centre and network

Issues to be resolved include: Who will sponsor the project? Who will finance the project? Who will be accountable for the project? Who will manage the various components of the

BDS solution?

38

Agenda









39

Focus of the Curriculum Framework Assignment

The curriculum development assignment focuses on understanding the skill needs of micro financiers and development of a plan to close the skill gaps

Stakeholder capacity building plan *

Develop a plan to increase awareness, interest and understanding of skills development legislation and BANKSETA Micro finance project

Identified more than 122 different stakeholders Interviewed 48 stakeholders Created a Communication Plan, Stakeholder Matrix

and Capacity Building Plan

Unit standards and micro-lender qualifications review

Assess required unit standards and qualifications

Assessed existing banking unit standards and unit standards developed by some of the training providers as an input into the survey

Learner needs analysis and profiles*

Assess existing skills and capabilities, identify gaps and future focus areas

Developed a survey for lenders and borrowers Conducted the surveys Developed a Lender and Consumer Needs Analysis

Establishment of curriculum and consultative forum*

Identify and appoint stakeholders to participate in consultative forum

Through stakeholder interviews, members for the 2 forums were appointed

Launched the 2 forums and held numerous meetings with each

Curriculum framework for micro financiers

Develop and agree framework with Curriculum Development Team

Reviewed training and curriculum best practices Used the results from the survey to develop a

curriculum framework that was reviewed by the Curriculum Development Team and other stakeholders

Skills programmes plan

Develop approach and plan to implement skills development iniatives

Assessed the need for a skills programme or learnership based on requirements of micro financiers

Delivery channel plan

Identify most appropriate channels to deliver skills development initiatives

Tested the most appropriate delivery mechanism for the different skill areas and included in the curriculum framework

* These deliverable are contained in other reports. This report focuses on the Curriculum Framework

40

What is a Curriculum Framework?A curriculum framework provides the guiding principles within which the methodologies and delivery methods of a training programme are defined

METHODOLOGIESCase studies

LecturesVideos, etc.

DELIVERY METHODSFace-to-face learning

Distance learning

IMPLEMENTATION PLANPrototype

PilotRoll-out

CURRICULUM FRAMEWORK

Includes guidelines around: Purposes, goals and objectives of

learning* Learning outcomes* Methodology for selecting, structuring

and delivering the training content* Processes to facilitate learning* Process to assess the learners Methods of evaluating intentions,

outcomes and methods Planning and execution of the

management of the setting in which the curriculum is implemented (e.g. full-time, part-time, lectured, distance, combination)

* Completed in project design phase

Ref: Skills Development, Ian Bellis, 2001

41

Curriculum Framework Success FactorsBest practice suggests that the fostering of a “learning organisation” culture will aid in the successful delivery of training initiatives

• Curricula must have a clearly defined vision, mission and goals

• Training should be modular and outcomes based

• Training content must be relevant to the trainee, and be based on trainee needs

• Training standards, systems and models must be clearly defined

• Curricula should offer a choice of training content and delivery mechanisms

• Training must be prioritised, addressing the most pressing needs first

• Training should be delivered at a convenient time, and in a convenient manner

• Registering for training should be easy for the trainee

• Feedback must be obtained from trainees to continuously improve programs

• Skills-based learning and people interfacing skills should ideally be facilitated through a face-to-face delivery channel to cater for questions and problem-solving

A curriculum framework should be flexible enough to incorporate a number of different means for developing and delivering training

A curriculum framework should be flexible enough to incorporate a number of different means for developing and delivering training

Ref: Training from Scratch, Nancy Kuhn,

42

Curriculum Framework Barriers to Success

• Lack of a cohesive approach to the deployment and delivery of training and development initiatives

• Lack of ownership and buy-in for training and development

• Lack of incentives to take advantage of the learning initiatives and to generate demand for training

• Often supply-driven and delivered in a top-down fashion, rather than from the target audience needs

• Training should be business-oriented, and not viewed as an extension of the basic general educational system

• Training services are not always accessible to the target audience

• Must be delivered via a suitable, convenient medium

• Geographic dispersion must be taken into account when planning the delivery of curriculum content

Significant barriers to success exist, which may significantly undermine the successful adoption of the curriculum by the micro finance industry

43

Training Delivery Principles Two main types of training delivery have been proposed, namely distance learning and face-to-face delivery

Description Advantages Disadvantages

DISTANCE learning

Knowledge-based

Delivery media include videos, internet, CDs, etc.

Controlled, consistent content

• Effective for large groups or multiple locations

Does not required trainer/trainee travel

Can contain large amounts of material

Accessible at learner’s convenience

Require suitable infrastructure to run training (e.g. computers for CBTs)

May be difficult to disseminate

May be difficult to update material (CDs or videos, does not apply to internet)

Limited bandwidth may result in slow delivery

FACE-TO-FACE learning

Skills-based

Delivery media include classroom, mentoring, apprenticeships, etc.

Easily customised and revised

Quick to develop

Minimal development costs

Trainees can ask specific questions

Slow learning rate

Inconsistencies from class to class

Scheduling often presents difficulties

Difficult to control and monitor

Micro financiers may be reluctant to make use of long-term classroom type learning due to work pressures. It is therefore important that consistency of

training content is provided through both distance and face-to-face channels

Micro financiers may be reluctant to make use of long-term classroom type learning due to work pressures. It is therefore important that consistency of

training content is provided through both distance and face-to-face channels

44

Training Delivery Channels – face-to-face learning

Channels Classroom Training Workshops Seminars

Advantages Instructor adapts to specific audience needs

Quickly developed Actual tasks can be simulated Allow exchange of ideas, elaboration of

content, feedback Conveys common message

Group or applied problem-solving applications

Content may be unique or tailored to group needs

Encourage collaboration, networking, and sharing of war stories

Experts present information to large groups of people in one location

Allows for networking Reinforces culture, etc. Motivational, depending on the

presenter

Disadvantages Content is potentially unstable/changing Resource availability may be a factor for

regional delivery Practice opportunities linked to case-

study materials, not necessarily linked to actual job

Content is one-time message High risk of doing competency wrong

Content is a one-time message Individual feedback may be limited

When to use In large groups at regional training sites Instructor as an expert, facilitator, and

role model

Can be conducted to solve a group problem; develop group process skills

Small groups at local office or regional site

Disseminate common information from "the" experts to a large group at a regional training site

One-time message

Cost / Development time

80-100 hours per hour of delivery Low development cost R350 per hour of development time



Recommendation Should be used where skills levels are low and perceived importance is high – especially where skills-based learning is called for

Should be used to develop “hot-skills” for the industry and to disseminate best practices

Should be used to disseminate topical and industry best practice information and develop “Hot skills” for the industry

There are three key face-to-face delivery channels: classroom,workshops and seminars

45

Training Delivery Channels – face-to-face learning

Channels Coaching Mentoring Role Play

Advantages Inexpensive to develop High transfer of knowledge Directly relevant to trainee’s job Trainee’s interact with coworkers

Inexpensive to develop High transfer of knowledge Directly relevant to trainee’s job Trainee’s interact with coworkers

Student demonstrates a skill in a simulation of the real situation

Apply knowledge and skills by demonstrating

Encourage collaboration, networking, and sharing of war stories

Immediate feedback is provided

Disadvantages Training may be inconsistently delivered Difficult to control/monitor Requires workers to be teachers Can disrupt regular workflow

Training may be inconsistently delivered

Difficult to control/monitor Requires workers to be teachers Can disrupt regular workflow

Training may be inconsistently delivered

Difficult to control/monitor

When to use On-the-job training On-the-job training In small groups at regional training sites





Recommendation Could be used to disseminate skills and knowledge obtained from seminars, workshops and experience to staff members who are new to their role or to the organisation. Coaching could also be used as a means of informal assessment of learners

Subject matter experts could be used to consult on best practice and up to date views on “Hot Topics” and problem solving

Could be used where people interaction skills are required e.g. in Client service scenario where the learner may need to develop practical techniques of how to deal with difficult clients

Coaching and mentorship are cheaper alternatives for face-to-face, but may lack consistency of approach and may fail due to lack of sustained support

46

Training Delivery Methods – distance learning

Methods Simulation Training CBT Video Tape

Advantages Student demonstrates a skill in a simulation of the real situation

Immediate performance feedback

Consistent delivery; learner controlled; flexible completion times/places

Individualized feedback Easy to track performance Available on demand Individualised self-paced instruction Content relatively stable Can contain large amounts of

information

Leverage "experts" time Consistent delivery Reduce travel costs to meetings, etc. Capture a "real" event Content relatively stable Interaction or feedback is not

necessary Flexible delivery times; could be

viewed at home

Disadvantages Can be expensive to develop Long development cycle May require high-tech equipment to run

Can be costly to update and produce Require necessary hardware to run

training Updates require burning new CBTs

Expensive to produce and update Requires necessary equipment to run

training Updates require development of new

videos

When to use When in-depth problem-solving, decision-making and application of skill is required

Individually at local office / home In large groups and / or multiple locations

Individually at local office / home


300-600 hours of development per hour of delivery

High development cost R350 per hour of development time





Recommendation Should be used for very complex decision-making and problem solving skills areas such as finance and risk management to accurately reflect a work scenario

Should be used extensively as a parallel medium to emulate face-to-face delivery. Should be used where the practicing of skills is required

Should be used extensively as a parallel medium to emulate face-to-face delivery. Should also be used where emulation of behaviours or skills are required

Simulation training, CBT’s and Videos could be used as complimentary as well as parallel delivery methods to face-to-face channel methods

47

Training Delivery Methods – distance learning

Methods Paper-based/Electronic Manuals Interactive multi-media Internet

Advantages Consistent delivery Portable Learner-controlled Available on demand Expert interaction not required for

elaboration Reduced travel costs

Combination of sound, graphics, text and video on a computer

Safe practice of skills Simulate actual tasks Stable content Interactive and motivational Training can occur on demand, at

point of need Reaches large audience

Allows participants to learn at their own pace through an internal Internet site

Reduces need for trainers Material is easily updated / customised

Disadvantages Minimal feedback opportunities Expensive to revise content Generally low completion rates Content is potentially unstable Requires literate learners

Can be expensive to develop Relatively long development cycles Expensive to update

Limited bandwidth may result in slow response times

When to use Learner-controlled training that can be completed at point-of-need

Individually or in a small group Instructor-led or self-study

When the content does not require much facilitation or interaction

Individually at local office / home



Medium development cost R350 per hour of development time





Recommendation Should be used to supplement face-to-face delivery as well as a parallel medium for distance learning

Should be used as a parallel medium to emulate face-to-face delivery. Should be used where the practicing of skills is required or problem solving ability needs to be developed

Should be used to supplement face-to-face delivery as well as a parallel medium for distance learning

Should be used as the primary mechanism for distribution of content

Manuals, multimedia and the internet could be used as complimentary as well as parrallel delivery methods to face-to-face delivery methods

48

Guiding Principles

Training design and delivery should be modular

Training must be relevant to the learner, and impact their performance at

work

Training development must be prioritised based on micro financier needs

Training development must be flexible, and be easy to update when required

A combination of experiential and situational methodologies should be used

A combination of face-to-face and distance learning channels should be used

Content should be available over multiple delivery channels

Principles guiding the delivery of training to micro financiers were developed, taking into account global best practice

Within these guiding principles, an approach to the development, delivery and management of training has been defined

Within these guiding principles, an approach to the development, delivery and management of training has been defined

49

Strategy for Delivering Training

LEARNING AND TRAINING DEVELOPMENT

TRAINING PROVIDER NETWORK

• Downloadable training material• Access to training catalogues • Schedule of training courses

TRAINING CENTRE

DISTANCE LEARNING FACE-TO-FACE LEARNING

MICRO FINANCIERS

Call centre

Internet Portal

A central coordinating body, or training centre, is required to ensure efficient planning, design and delivery of training to micro financiers

The training centre and the proposed BDS centre should be one entity, to ensure economies of scale

The training centre and the proposed BDS centre should be one entity, to ensure economies of scale

50

Strategy for Delivering Training

INFORMATION

The training centre is responsible for the development, management and delivery of the training curriculum to the micro financiers

Online access

Phone / fax

Training CentreFRONT-office

INTERNETPORTAL

CALL CENTRE

ACTIVITIES

BACK-office

Training curriculum

Order videos, CDs, manuals

etc.

List of subject matter experts

(SMEs)

Catalogue of training material

List of training providers

Register for workshops /

seminars

Conduct online training

Register for face-to-face

training

Review and update curriculum

Portal maintenance

Certification of learners

Research new content / delivery mechanisms

Manage learner database

Coordinate trainee feedback

The training centre could be outsourced by BANKSETA The training centre could be outsourced by BANKSETA

51

Incentives

Involvement of micro finance practitioners in the development of the content of the training materials will the create a sense of ownership of the programme

Buy-in for the benefits of the training initiatives will be generated through a needs-driven strategy

The creation of micro finance best practices will be generated through practitioner involvement in the project and in so doing generate demand for the training

Monetary incentives in the form of skills development grants will afford micro financiers the opportunity to claim back on their skills levies paid. Qualifying employers can access up to 60% of their annual contributions for skills development under the sector grant scheme

Planning grants – through the registration of a skills development facilitator as well as the submission of a workplace skills plan

Implementation grants– through the submission of a skills development implementation report

A significant risk to the successful delivery of training to the micro finance industry is the perceived lack of real business benefits

Incentives in the form of skills development grants would be the main monetary incentives for micro finance businesses

Incentives in the form of skills development grants would be the main monetary incentives for micro finance businesses

52

Approach Overview

Qualitative Interviews with Stakeholders

Web-based Electronic Survey

Learner Needs Analysis

Curriculum Development Team Workshops

Curriculum Framework

Research Best Practice

Consultation with External Subject Matter Expert

Over the past nine weeks, the project team has been actively collecting data and consulting stakeholders on learner skills and business needs

Consultative Forum Workshops

53

Curriculum Content Overview

The majority of South African micro finance businesses are small to medium sized businesses and it is with this in mind that the overall modular approach to the training needs of micro financiers was taken

The contextual learning needs of a micro finance business were looked at from a small to medium sized business perspective, where every aspect of the business was seen as a training module

International business school models were applied to source the various training modules that would be appropriate to a small to medium-sized financial services business

Several industry practitioners and stakeholders were approached for their input on the training requirements of a micro finance business. Responses from these interviews were used to add micro finance industry-specific topics to the curriculum

Existing unit standards for the banking industry were used

An external subject matter expert was consulted on the overall approach and content of the curriculum framework

Workshops with the Curriculum Development Team and the Consultative Forum were held to validate the approach and high level content

The curriculum content has been developed through the application of best practice models, consultation with industry experts and stakeholders, and the learner needs analysis

54

Risk Management Outline

The Risk Management skills area consists of four modules:

Module Definition Fraud Management The ability to minimise fraudulent transactions in your business through the establishment of

effective fraud prevention policies and procedures

Risk Management Identification and analysis of risk to the business. This includes managing the impact of interest rate changes and specific client risks


Identification and analysis of risk to the business in relation to the expected returns from loans made

Client Credit Limits Setting of standard credit limits for clients

Risk management had the highest rating of importance in the learner needs analysis survey

Classroom based courses should be run to development this important skill area, supported by coaching and electronic material

Classroom based courses should be run to development this important skill area, supported by coaching and electronic material

Substantial face-to-face initiatives

to develop foundational skills in Risk Management

Supported by mentoring

programmes, coaching,

seminars and workshops

Supported by distance learning initiatives such as CBT, Manuals and web-based

learning

Recommended delivery channels and training methodologies

55

Risk Management – Survey Findings

The overall importance of risk management is 84% whilst the reported skill levels average 64% and 21% of respondents have received training in this area

There appears to be a high need for training in fraud management and the setting of client credit limits

There appears to be a high need for training in fraud management and the setting of client credit limits

Overall, risk management is rated as the most important skill area by micro financiers

The importance of the four risk management skills were similarly rated by micro financiers (83%-87%), as were the levels of expertise (61%-68%)

The fewest respondents had received training in fraud management (16%)

Most respondents had received training in ‘risk and return analysis’ (24%)

Client credit limits are an important skill, as this could limit the danger of borrowers becoming over-indebted and unable to repay their loans due to reckless lending. The training received in this skill is 21% and suggests a priority skill for trainingImportance (%) Skill Level (%) % Received Training

Risk Management

0

10

20

30

40

50

60

70

80

90

100

Fraud Management

Risk Management



Per

cen

t\

87

63 61

84 83

62

83

68

56

Risk Management - Delivery Recommendations

Module Learning Outcome

Delivery Channel

Type of Channel Training Method

Fraud Management

Manage fraud within a micro finance business

Face-to-face

Classroom Training could be used at the beginning of the learning process to develop foundational knowledge of fraud management

Seminars and workshops could be used to showcase latest findings and trends in fraud management from experts in the industry and be offered on an ongoing basis

Coaching could be used to disseminate knowledge to new recruits into a business and could be used as a basis for informal assessment

Mentoring programmes could be used to reinforce the foundational learning from classroom training

Case Studies on South African fraud could be developed through interviews with micro financiers who have been victims of fraud

Electronic and paper-based manuals with methods to manage and combat micro finance targeted fraud could be used to help establish content and situational knowledge of fraud management principles

Manuals could be supplemented by Instructional videos depicting real life examples of how fraud has successfully been managed within micro finance businesses in South Africa

Guest speakers from the micro finance industry could be used in classroom training, seminars and workshops to convey a sense of how fraud is practically managed in a businessDistance

Learning Electronic Information Exchanges and BDS

Web portal, could be used to disseminate training materials cheaply throughout the country

BDS call centre / support centre could be used to purchase training materials from


Identify and apply appropriate criteria for calculating repayment ability in relation to expected returns from loans made

Face-to-face

Seminars and workshops could be used to establish practical skills in risk return analysis

Coaching could be used to disseminate Risk and return analysis skills

Risk and return Analysis Manuals could be developed, based upon a typical micro finance business model

A CBT with a practical Ms Excel-based tool to simplify and standardise the calculation and analysis of risk and return could be developed in consultation with micro financiers

A Case study of how analysis could be applied within a micro finance business to accurately predict risk and return could be developed and could also include a business simulation model to show

A Business simulation model, showing the application of risk and return principles could be developed so that learners can practice and develop skills that can be directly transferred into their business

Distance Learning

Electronic Information Exchanges and Web-based training, could be used to disseminate content information cheaply throughout the country

BDS call centre / support centre could be contacted to arrange for manuals and CBT’s

The management of risk is fundamental to the running of a micro finance business

57

Risk Management - Delivery Recommendations


Delivery Channel


Risk Management

Structure a risk management policy and procedure for a micro finance institution

Face-to-face

Classroom Training, could be used at the beginning of the learning process to develop foundational knowledge of risk management policies and procedures

Seminars and workshops could be used to showcase latest findings and trends in risk management from experts in the industry and be offered on an ongoing basis

Coaching could be used to disseminate knowledge to new recruits into a business and be used as a basis for informal assessment


Electronic and paper-based manuals with guidelines on how to establish a sound risk management policy for a micro finance business could be developed. Examples of established risk management procedures could be included in the content and serve as a basis for application within the learner’s business environment

Case Studies developed through consultation with micro financiers could be used to depict good and bad applications of risk management policies and procedures

Guest speakers could be used to talk about how they set up a risk management policy and procedures for their business and what practical difficulties they had in developing and implementing

Distance Learning

Electronic Information Exchanges and BDS Web portal, could be used to disseminate training materials cheaply throughout the country



Set standardised credit limits for clients

Face-to-face

Seminars and workshops could be used to showcase latest findings and trends in credit limit setting from experts in the industry


Electronic and paper-based manuals with guidelines on credit limit setting within a micro finance business could be established. Principles of credit limit setting and management could be included in the content to build foundational and contextual knowledge of why the skill is important to a micro finance business

A CBT could be developed with scenarios on client credit limit setting and possible associated risk stemming from incorrect limit setting

Case Studies on credit limit setting could be developed through consultation with micro financiers to show benefits of sound credit limit setting principles

Distance Learning


The management of risk is fundamental to the running of a micro finance business

58

Loan Book Management Outline

The Loan Book Management skills area consists of five modules:

Module Definition

Loan Repayments The ability to effectively record loan data, collect all instalments due and correctly issue receipts

Loan Book Reconciliation

The ability to reconcile loan repayments with the loan book

Bad Debt Recovery Process

The effective operation of procedures, systems and practices to recover overdue loan repayments and bad debts

Interest Calculation Ability to calculate interest on different loans in your business

Debt Collector Appointment and Management

Appoint and manage debt collection agents

Loan book management was rated as the second most important skill in the survey

Substantial face-to-face initiatives

to develop foundational skills in Risk Management

Supported by mentoring

programmes, coaching,


Supported by distance learning initiatives such as CBT, Manuals and web-based

learning


This key skills needs to be developed through classroom-based learning, supported by coaching and electronic material

This key skills needs to be developed through classroom-based learning, supported by coaching and electronic material

PIENAAR:

hidden

PIENAAR:

hidden

59

Loan Book Management – Survey Findings

The overall importance of loan book management is 82% whilst the reported skill levels average 68% and 28% of respondents have received training in this area

Staff need to be trained on how to manage the bad debt recovery process, as well as the appointment and management of debt collectors

Staff need to be trained on how to manage the bad debt recovery process, as well as the appointment and management of debt collectors


‘Loan Repayments’ achieved the highest level of importance (91%) in the entire survey, which is not surprising due to the nature of the industry. As expected, the skill levels are high in this area (77%) and 40% of respondents have received training in this area

The appointment and management of debt collectors is viewed as the least important skill, with low skill levels and only 18% of respondents had received training in this area. This could be attributable to the fact that most micro financiers collect debts themselves

Training and skill levels are quite low in ‘bad debt recovery processes’ indicating a priority for training

Loan Book Management

91 88 87 84

7077

7264

74

58

0

10

20

30

4050

60

70

80

90

100

Loan

Repayments

Loan Book

Reconciliation

Bad Debt

Recovery

Processes

Interest

Calculations

Debt Collector

Appointmentand

Management

Per

cen

tPIENAAR:

hidden

PIENAAR:

hidden

60

Loan Book Management Delivery Recommendations


Delivery Channel


Loan Repayments

Set up a policy and procedure for recording loan data, collecting all instalments due and correctly issuing receipts

Face-to-face

Seminars and workshops could be used to showcase latest findings and trends in loan repayment management from experts in the industry and should be offered on an ongoing basis


Electronic and paper-based manuals could be used to help establish content and situational knowledge of loan repayment principles and included guidelines on the setting of policies and procedures for the loan repayment function

Case Studies could be developed in consultation with micro financiers to show various loan repayment procedures and policies and to highlight possible pitfalls of inappropriate loan repayment practices

Distance Learning



Loan Book Reconciliation

Reconcile loan repayments with the loan book

Face-to-face

Classroom Training could be used at the beginning of the learning process to develop foundational knowledge of loan book reconciliation

Seminars and workshops could be used to showcase latest findings and trends in loan book reconciliation from experts in the industry and should be offered on an ongoing basis


Electronic and paper-based manuals could be developed to show the standard steps to be followed when reconciling a loan book. This manual should be developed in consultation with micro finance practitioners to ensure relevance

A CBT could be developed to show the process to be followed to reconcile the loan book with repayments done. Scenarios could be included, showing possible solutions for common errors in loan book reconciliation

Distance Learning



Loan book management is a core business function for a micro financier

PIENAAR:

hidden

PIENAAR:

hidden

61



Delivery Channel


Bad Debt Recovery Process

Set up procedures, systems and practices to recover overdue loan repayments and bad debts

Face-to-face

Classroom Training, could be used at the beginning of the learning process to develop foundational knowledge of loan book reconciliation

Seminars and workshops could be used to showcase latest findings and trends in bad debt recovery process management from experts in the industry and should be offered on an ongoing basis


Electronic and paper-based manuals could be used to help establish content and situational knowledge of loan repayment principles and be supplemented by Instructional videos

Case Studies could be developed in conjunction with micro finance practitioners to

Distance Learning



Loan book management is a core business function for micro financiers

PIENAAR:

hidden

PIENAAR:

hidden

62



Delivery Channel


Interest Calculation

Calculate interest on different loans in a micro finance business

Face-to-face

Seminars and workshops could be used to showcase latest findings and trends in loan book reconciliation from experts in the industry and should be offered on an ongoing basis


Electronic and paper-based manuals could be developed in consultation with a cross-section of micro financiers who are involved in different types of lending e.g. Housing, short-term and term lending to develop appropriate models of interest calculation for the industry

A CBT could be developed with a practical, standardised tool in MS Excel to calculate interest and repayment schedules for various types of loans

Distance Learning

Electronic Information Exchanges and BDS portal, could be used to disseminate training materials cheaply throughout the country


Debt Collector

Appointment and

Management

Appoint and manage debt collection agents

Face-to-face

Seminars and workshops could be used to showcase latest findings and trends in dent collection appointment and management from experts in the industry

• Coaching could be used to disseminate knowledge to new recruits into a business and be used as a basis for informal assessment

Electronic and paper-based manuals could be used to help guidelines on the appointment of debt collection agents for a micro finance business. Both micro financiers and debt collection practitioners could contribute to the development of this manual

Case Studies could developed in conjunction with micro financiers and debt collection agencies. The case study could show the various operating models of collection agents and how they would best suit the needs of their micro finance business. Success as well as failure stories could be depicted.

Distance Learning



Loan book management is a core business function for micro financiers

PIENAAR:

hidden

PIENAAR:

hidden

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Cash Management Outline

The Cash Management skills area consists of two modules:

Module Definition Cash Management Procedures

The policies and procedures to manage daily cash floats and cashing up to ensure effective control

Security Policies and Procedures

Setting up policies and procedures for limiting the amount of cash on the premises and securing the premises against robberies, theft and fraud

According to the results from the survey, cash management has the third highest rating of importance

Predominantly Internet –based and

paper-based training materials

The development of Industry best practices could be used to develop industry-wide policies and procedures for the containment of physical risk for micro

financiers

The development of Industry best practices could be used to develop industry-wide policies and procedures for the containment of physical risk for micro

financiers


Supported by coaching,


64

Cash ManagementSurvey Results

There appears to be a need for training in the security policies and procedures pertaining to cash management

There appears to be a need for training in the security policies and procedures pertaining to cash management

Security of cash appears to be important to micro financiers (82%) since most micro financiers deal with a large amount of cash on their premises. 29% of respondents had received training in this skill and the reported skill levels were 67%

‘Security policies and procedures’ were also rated quite high, however fewer respondents said they had received training in this skill (18%)

The overall management of cash was less important (59%) to respondents


The overall importance of cash management is 81% whilst the reported skill levels average 65% and 24% of respondents have received training in this area

Cash Management

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Cash Management - Delivery Recommendations


Delivery Channel


Cash Management Procedures

Develop policies and procedures to manage daily cash floats and cashing up to ensure effective control

Face-to-face

Face to face training methodologies not indicated due to the nature of the subject being predominantly policy and procedure setting based

Electronic and paper-based manuals could be used to help establish content knowledge of how to develop policies and procedures as well as disseminate industry best practices

Seminars held by industry experts could be arranged to update micro finance practitioners on the latest trends in cash management procedures to contain physical risk

Coaching could be used to disseminate the latest cash management best practices within businesses

Distance learning

Electronic Information Exchanges and Web-based training, could be used to disseminate latest trends and best practice information cheaply throughout the country

Training materials could be purchased from BDS call centre / training centre


Set up policies and procedures for limiting the amount of cash on the premises and securing the premises against robberies, theft and fraud

Face-to-face


Electronic and paper-based manuals could be used to help establish content knowledge of how to develop policies and procedures

Seminars and workshops held by security industry experts could be arranged to update micro finance practitioners on the latest trends in containing physical risk for micro finance businesses

Coaching could be used to disseminate the latest trends in physical risk containment practices

Distance learning

Electronic Information Exchanges and Web-based training, could be used to disseminate latest trends and best practice information on the setting of security policies and procedures Training materials could be purchased from BDS call centre / training centre

The management of cash is core to the running of a micro finance business

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Cash Management - Delivery Recommendations


Delivery Channel


Cash Management Procedures

Develop policies and procedures to manage daily cash floats and cashing up to ensure effective control

Face-to-face

Face to face training methodologies are not recommended due to the nature of the subject being predominantly policy and procedure setting based


Distance Learning




Set up policies and procedures for limiting the amount of cash on the premises and securing the premises against robberies, theft and fraud

Face-to-face



Distance Learning

Electronic Information Exchanges and Web-based training, could be used to disseminate latest trends and best practice information on the setting of security policies and procedures


The management of cash is core to the running of a micro finance business

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Client Service Outline

The Client Service skills area consists of five modules:

Module Definition Client Request Resolution Ability of staff to deal with client requests for loan information, dispute resolution and requests

for rescheduling of loans

Product and Service Knowledge

The level with which staff are able to successfully provide product and service information to clients

Client Acquisition and Retention Strategies

Ability to identify innovative ways of acquiring and retaining customers on an ongoing basis

Client Education and Coaching Educating and coaching clients in skills to handle their finance so that they can meet their

commitments and not incur excess debt

Client Service Improvement

Ability to identify ways to improve service to clients and to act on problem areas

Client Service was rated as the fourth most important skill area in the learner needs analysis survey

Foundational skills

development through

classroom training

Supported by case studies and

manuals

Followed up by coaching and

mentoring workshops

A programme on Client Service could be run that covers the skills and knowledge components of client service

A programme on Client Service could be run that covers the skills and knowledge components of client service

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Client Service – Survey ResultsThe overall importance of client service is 82% whilst the reported skill levels average 65%, and 24% of respondents have received training in this area

‘Client acquisiton & retention’ is an important skill and training in this skill could receive a high priority due to the low level training received

‘Client acquisiton & retention’ is an important skill and training in this skill could receive a high priority due to the low level training received


‘Client request resolution’ and ‘Product and service knowledge’ are seen as the most important skills for client service, and the skill levels are relatively high

Client service improvement is rated the least important of all the client service skills, and the skill levels are correspondingly low

Client acquisition & retention was rated fairly high, although experience would suggest this to be the most important skill for micro financiers given the pressures of increased competition on their businesses. Only 19% of respondents had received training in this skill

Client Service87 85

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Client Service Delivery Recommendations


Delivery Channel


Client Request

Resolution

Effectively deal with client requests for loan information, dispute resolution and requests for rescheduling of loans

Face-to-face

Role plays could be used to support classroom based training. Scripts for different client requests could be created and different roles enacted by trainees

Coaching could be used to disseminate knowledge to new recruits into a business and to provide ongoing training to staff on managing client requests. A client resolution scorecard could be created by the staff which is reviewed weekly and successes tracked

Electronic and paper-based manuals could be used to educate on the basic request resolution processes and frequently asked questions. These could include Client Resolution Job Aids and Process posters to assist staff members

Case Studies would form the basis of the role plays and be based on real examples collected from branches or reported at the MFRC

Distance Learning

Electronic Information Exchanges and BDS Web portal, could be used to disseminate training materials cheaply throughout the country and advise members of news

BDS call centre / support centre could be used to purchase training materials from a central point

Product and Service

Knowledge

Provide product and service information to clients

Face-to-face

Classroom Training, could be used at the beginning of the learning process to develop basic knowledge of micro financing products and services. This training must include ways of communicating this information to clients.

Coaching could be used to disseminate knowledge to new recruits and to provide training on any new products or services

Electronic and paper-based manuals could be used to educate staff members and new recruits on basic products and services offered by the business. A job aid and/or “pop quizz” on product features could also be used to ensure information is internalised

Distance Learning



With increasing competition, client service will become one of the differentiators in the micro finance industry

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Delivery Channel

Type of Channel Training Methodology

Client Acquisition

and Retention Strategies

Identify innovative ways of acquiring and retaining customers on an ongoing basis

Face-to-face

Classroom Training, could be used at the beginning of the learning process to develop basic acquisition and retention strategies for managers

Seminars and workshops could be used to showcase latest best practices for acquisition and retention I.e further research on Customer Lifetime Value and presentations from experts in the field

Coaching could be used to disseminate knowledge to staff

Case Studies on different company’s strategies could be used as supporting material

Electronic and paper-based manuals could be used to help establish basic acquisition and retention knowledge

Distance Learning



Client Education

and Coaching

Educate and coach clients in skills to handle their finance so that they can meet their commitments and not incur excess debt

Face-to-face

Seminars and workshops could be used to train learners in techniques on how to educate and coach clients

Role plays could be used to support transfer of skills techniques in education and guiding clients

Coaching could be used to disseminate skills and techniques to new recruits into a business and to train on new approaches or methods

Electronic and paper-based manuals could be used to help establish the “how” and the “what” to communicate to clients

Distance Learning




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Delivery Channel


Client Service Improvement

Identify ways to improve service to clients and to act on problem areas

Face-to-face

Seminars and workshops could be used to showcase latest findings and trends in client service improvement from experts in the industry

Role plays could be used to help staff identify ways to improve service

Coaching could be used to disseminate skills and techniques to new recruits into a business and ensure ongoing development takes place. This skills lends itself to ongoing coaching and guidance

Electronic and paper-based manuals could be used to help establish basic client service principles and behaviours

Video could be used to illustrate international or local examples of good client service

Distance Learning




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Finance Outline (1)

The Finance skills area consists of nine modules:

Module Definition

Cost Management Ability to understand cost management data and cost management reports required to run a micro finance business

Management Report Preparation

The ability to prepare and interpret management reports on client trends, overdue loans, bad debt and other information essential to managing the business

Financial Statement Preparation

The ability to prepare and /or read the financial statements and form an opinion of the financial health of the business.

Business Ethics Alignment

Applying business practices that will contribute in setting an image of the micro finance industry as part of the formal financial services sector, always acting in the interest of clients and the community

Budgeting and Financial Planning

The ability to prepare budgets and conduct financial planning in a business (debt, cashflow, payments etc)

Finance has nine skill areas that require development

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Finance Outline (2)

The Finance skills area consists of nine modules:

Module Definition

Internal Audit Ability to examine the business’s accounting records, processes, systems and administration to ensure compliance and to prevent fraud

Accounting Packages

The ability to use computer-based accounting packages

Cash Flow Management

Having an understanding of the amount of cash needed to fund the demand for loans at different times of the month and year (e.g. In December, the demand for loans may increase due to Christmas) and ongoing operations

Tax Calculation The ability to calculate tax calculations (e.g.employees and provisional tax).

Finance has nine areas that require development

Foundational skills

development through

classroom training

Seminars, workshops and

coaching

Case studies, simulations and

CBT

In the past, there has been a lack of focus on internal auditing by micro financiers, a trend which could open such businesses to internal fraud

In the past, there has been a lack of focus on internal auditing by micro financiers, a trend which could open such businesses to internal fraud

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FinanceSurvey Results

The overall importance of finance is 78% whilst the reported skill levels average 61% and 29% of respondents have received training in this area

Training could be offered across all finance skill areas to the relevant people who fulfill financial functions in micro finance organisations

Training could be offered across all finance skill areas to the relevant people who fulfill financial functions in micro finance organisations


As expected, the financial functions of micro financiers are very important, with many skill areas achieving an 80% importance level

A cause for some concern is the low level of skills reported in the preparation of financial statements (65%), despite the finding that 42% of respondents had received training. This suggests that past training has not been effective

‘Tax calculations’ were rated as the least important skill, with skill levels and training far below that of the other finance skills. Perhaps this function is performed by tax consultants or accountants and not by micro financiers themselves. There is a need for training in this area in order to enable micro financiers to understand the tax implications of business operations

Finance

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Finance Delivery Recommendations


Delivery Channel


Cost Management

Understand cost management data and cost management reports required to run a micro finance business

Face-to-face

Classroom training could be used at the beginning of the learning process to develop foundational knowledge of cost management


Seminars and workshops could be used to showcase latest findings and trends in cost management from experts in the industry

Coaching could be used to disseminate knowledge to new recruits into a business

Case studies could be developed in consultation with micro financiers where a learner would need to perform a profitability analysis (cost drivers) – identify the major costs of 3 different micro finance businesses and ways of reducing their costs

Practical exercises could be developed where the learner would need to prepare a cost budget for their micro finance business

Specific computer application training for cost management reporting

Electronic and paper-based manuals could be used to help establish content and situational knowledge of costing accounting and cost management principles

A CBT could be developed which would take learners through the micro finance case studies and practical exercises as mentioned above

Distance Learning



Management Report Preparation

Prepare and interpret management reports on client trends, overdue loans, bad debt and other information essential to managing a micro finance business

Face-to-face

Classroom training, could be used at the beginning of the learning process to develop foundational knowledge of cost management




Electronic and paper-based manuals could be developed which incorporate the interpretation and understanding of exception reports, warning signs of potential problems, reasons for rising costs and for declining revenues

A CBT with a simulation of how to put together management reports for a micro finance business could be developed and be based upon

Case studies could be used to impart contextual and situational knowledge and solutions

Distance Learning



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Module Learning Outcome Delivery Channel


Financial Statement

Preparation

Prepare and /or read the financial statements and form an opinion of the financial health of the business

Face-to-face

Classroom training could be used at the beginning of the learning process to develop foundational knowledge of Income statements,balance sheets and cash flow statement preparation


Seminars and workshops could be used to showcase latest findings and trends in financial statement preparation from experts in the industry


Electronic and paper-based manuals could be used to help establish content and situational knowledge of how to read and interpret financial statements as well as develop an understanding of the interdependencies between the different types of financial statements

An interactive CBT could be developed where the learner would “prepare” financial statements for a hypothetical micro finance business

Case Studies could be developed and used to compare financial statements from several micro-finance businesses and could form the basis of an analysis of relative financial ‘health’ of the businesses

Distance Learning


Training materials could be purchased from a BDS call centre / training centre

Business Ethics

Alignment

Apply business practices that will contribute in setting an image of the micro finance industry as part of the formal financial services sector, always acting in the interest of clients and the community

Face-to-face

Seminars and workshops could be used to showcase latest findings and trends in business ethics alignment from experts in the industry

Coaching could be used to build and perpetuate the application of business ethics in the micro-finance industry

Case Studies of micro-finance business practices could be developed and be used to depict implications of not applying ethical business practices. The case study could involve learners making value judgments and giving feedback on what they would do in the given situations

Electronic and paper-based manuals could be used to help establish content and situational knowledge of business ethics for the micro-finance industry

Distance Learning




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Delivery Channel


Budgeting and

Financial Planning

Prepare budgets and conduct financial planning in a business (debt, cash flow, payments

etc)

Face-to-face

Classroom training, could be used at the beginning of the learning process to develop foundational knowledge of budgeting and financial planning


Seminars and workshops could be used to showcase latest findings and trends in budgeting and financial planning from experts in the industry


Case Studies could be used to develop an understanding of what should be included in a budget and how to calculate budget entries. In addition, the case study could help the learner identify strategies to maximise cash flow while at the same time ensuring timeous payment by customers

Electronic and paper-based manuals could be used to help establish content and situational knowledge of how to plan what finances a hypothetical micro finance business will need in the future based on past expenditures as well as develop an understanding of the differences between cash and credit

Distance Learning




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Delivery Channel


Internal Audit

Examine the business’s accounting records, processes, systems and administration to ensure compliance and to prevent fraud

Face-to-face

Classroom training could be used at the beginning of the learning process to develop foundational knowledge of internal auditing practices


Seminars and workshops could be used to showcase latest findings and trends in cost management internal auditing practices be used to disseminate knowledge to new recruits into a business

Case studies could be developed from actual micro-finance businesses and be used to assimilate do’ s and don’ts of internal auditing

The case studies could be supplemented by a CBT which could take the learner through the steps on how to conduct an internal audit

Electronic and paper-based manuals could be used to help establish content and situational knowledge of how to conduct an internal audit and could include topics such as:

What constitutes an audit The importance of conducting

an internal audit Computerised accounting

packages vs. manual accounting methods

How to prepare a full audit for reporting purposes

Audit a hypothetical micro financier’s business and identify problems

Learners could be asked to complete an assignment in which they conduct a mock internal audit of their own micro-finance business

Distance Learning




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Delivery Channel


Accounting Packages

Use computer-based accounting packages

Face-to-face

Classroom training, could be used at the beginning of the learning process to develop foundational knowledge of accounting packages. (Existing training courses which are currently being presented by software vendors could be incorporated into the curriculum)

Seminars and workshops could be used by accounting package vendors to showcase latest trends in accounting packages

Electronic and paper-based manuals could be developed and distributed by Software vendors for their specific packages. Topics that could be included in the manual:

Manual vs electronic accounting methods

Introduction to basic accounting principles

Case studies could be used to show the application of accounting packages in micro finance businesses

Distance Learning


Training materials could be purchased from a BDS call centre / training centre

Cash Flow Management

Understand the amount of cash needed to fund demand for loans

Face-to-face

Classroom training, could be used at the beginning of the learning process to develop foundational knowledge of cash flow management




Case studies could be developed where learners can analyse the cash flow positions of various micro-finance businesses and give input on how to optimise cash flow for “ailing businesses”

Electronic and paper-based manuals could be used to help establish content and situational knowledge of cash flow management principles Topics that could be included :

Predicting the amount of cash needed based on customer behaviour and past loan history

Identifying ‘busy’ times of the year and month and budgeting accordingly

A business simulation CBT could be sourced or developed which would help build skills in effective cash flow management

Distance Learning



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Delivery Channel


Tax Calculation

Calculate tax calculations (e.g.employees and provisional tax)

Face-to-face Classroom training, could be used at the beginning of the learning process to develop foundational knowledge of tax calculations and principles of South African tax




Assignments could be used where learners are required to :

Prepare hypothetical tax returns for a micro finance business

Complete a VAT claim form for a hypothetical business

Electronic and paper-based manuals could be used to help establish content and situational knowledge of tax calculation principles. Topics that could be included :

Understanding the different types of taxes applicable to a micro financiers business

Learning how to calculate PAYE for a number of different employees

Understanding the process of registering for tax purposes

Distance Learning



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Recommendations on Skills Programmes / Learnerships

No qualification in micro finance exists at present, leaving the learner without a specific goal / qualification to work towards

The approach to the training of micro finance related topics has been very fragmented, with little agreement between providers on content, methodologies and guiding principles

In the past, training has either been very generic in nature or very specific to a particular business

There is a distinct lack of existing micro finance specific accredited education and training institutions to offer the formal training components of the learnership

Capacity needs to be developed within the training industry to cater for the specific training needs of micro financiers

Capacity building may take a number of years before training providers are proficient in the delivery of micro finance specific training content

Modules within identified skills areas could form the basis of a skills programme, which could be seen as credits towards a qualification in micro finance

A skills programmes should be instituted initially, with scope to develop a learnership in the future as soon as a formal qualification in micro finance is developed and capacity has been built for training providers

A skills programme comprising several modules should be developed and micro financiers can select the courses according to their needs

A skills programme comprising several modules should be developed and micro financiers can select the courses according to their needs

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Recommendations on Skills programme

Purpose Provide micro finance practitioners with a wide choice of

industry specific and generic training to promote professionalism through building knowledge and skills in the industry

Focus The Skills programme will initially be focused on developing

skills in competency areas identified as being high priority. These areas have been identified in the learner needs analysis as Risk Management, Loan Book Management, Client Service, Legal and Regulatory Compliance, Cash Management and Finance

Once these skills programmes have been rolled out, the rest of the skills areas can be developed as part of the skills programme

Orientation Relevance, importance and necessity of the Skills

programme should be driven through micro finance business needs and demand

Learning Activities A combination of distance learning and face-to-face learning

activities will need to be coordinated through a central body. The proposal is that this be a centralised BDS / Training centre

Several skills programmes, made up of modules could be implemented. The overall guiding principle should be flexibility of learning, based upon needs

Skill areas e.g. Risk Management,

Client service,Loan book Management

Modulese.g. within Risk Management,

Fraud Management is a module and could form the

basis for a credit towards a qualification

Sequencing of learningHigh level recommendations of the sequencing of learning events

should be formulated e.g. Business strategy should come before funding

Skills programmes

Ref: Skills Development, Ian Bellis, 2001

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Overall Conclusions

The implementation of the training should be pushed through in the form of modular-based skills

programmes

The overall guiding principle should be that of a learning organisation approach

The delivery of training materials should be through a combination of different delivery channels and

should be offered in parallel through both distance and face-to-face methods

Use should be made of the 80 / 20 principle when implementing the Skills programme

The 20 %of learning that will deliver 80% of the value should be prioritised in the roll-out

Extensive use should be made of South African, micro finance industry specific content for case

studies and other training materials

Extensive marketing of the Skills programme should be done to increase awareness

Skills programmes, made up of prioritised modules could be implemented as flexible learning offerings to the micro-finance industry

Learning initiatives should be prioritised by industry skills needsLearning initiatives should be prioritised by industry skills needs

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Next Steps

Final agreement on the prioritisation of skills areas should be reached by the project steering committee

More in-depth content knowledge for each skills area should be identified through consultation with a wide range of industry experts

Expression of interest communications need to be developed and should be expressly geared towards service providers who are able to deliver on the development of agreed prioritised skills training materials

Training providers who were identified by the project team as well as those who responded to the expression of interest should attend a detailed briefing session on the express requirements for the development of training materials for the prioritised skills areas

Development timelines, level of detail, materials content quality assurance standards, guidelines for delivery methods of training materials such as CBT, videos and manuals should be outlined in the briefing sessions

Feedback from attendees should be obtained and recorded for RFP purposes

An Request For Proposal (RFP) should be sent out to all interested training provider parties

Unit standards should be developed from the skills programmes once the detailed design of the curriculum has been established

Prioritised skills areas should be agreed upon and developed first

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Agenda









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Focus of the Selection Assignment

The Selection Assignment focuses on selecting micro financiers and training providers for participation in the Micro Finance Skills Project

Selection Criteria

Determine the criteria for selecting micro financiers and training providers to participate in each of the following areas of the Micro Finance Skills Project:

Prototype Pilot Phase 1

Initial criteria identified Criteria workshopped with Curriculum Development

Team (CDT) Final criteria decided on

Selection Processes

Determine the high level processes for selecting micro financiers and training providers to participate in the project

Reviewed best practice procurement processes Tailored processes to align with project Developed a ‘process flow’ for selecting micro financiers

and training providers

Capacity Plan

Identify the gaps between the training required by micro financiers and the current capacity of training providers

Developed an excel spreadsheet for trainers to complete

Reviewed spreadsheet with CDT Sent spreadsheet to 96 potential training providers Received completed profiles and consolidated into one

database Identified gaps in terms of current capacity and ‘learner

needs analysis’

Contract Develop the high level content of an agreement for micro financiers and individual learners and a contract for training providers

Identified terms of agreement for individual learners Identified areas to be included in an agreement between

trainers and trainees Identified legal clauses to be incorporated into contract

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Selection Criteria – Micro Financiers

Micro financiers should be based in Gauteng, belong to an association or franchise and be willing and able to participate in the project

Criteria Reasons

Registered with the MFRC Legal, regulated lending operation Can be identified as a micro financier

Based in Gauteng

Focused proximity Reduction in cost Easier to manage

Either a consumer or SMME lender

Maintain focus Develop curricula specific to each type of lender

Association membership/ franchisee

Use existing loyalties and communication channels

Maximise participation by sponsorship and recommendation from association/franchiser

Willing and committed

Must be committed to completing training Must be willing to participate in prototype, pilot or

phase 1 as the need arises

Criteria for selecting the first 200 micro financiers for Phase 1 of the Micro Finance Skills Project

Examples of criteria for selecting micro financiers

Gauteng

Consumer and SMME micro financiers will be the focus of the

first phase of the project

Consumer and SMME micro financiers will be the focus of the

first phase of the project

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Project TargetsIn line with the project targets, a total of 200 consumer and SMME micro financiers will be selected to participate in the project

No

SM

ME

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Can

did

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ase

Yea

r 0

Del

iver

y

Yea

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Del

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y

Yea

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Del

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y

Yea

r 3

TO

TA

LS

1 Micro lenders 0 200 400 600 1200 2 SMME-Borrower

clients Micro-lenders Banks

0 0

0 0

250 250 (120 for BDS)

350 350 (120 for BDS)

600 600 1200

3 Individual Borrower clients Pilot Micro-lenders Banks

0 0 0

0 0 0

200 800 1200

300 1200 2300

500 2000 3500 6000

4 Service providers 30% 60% 10% 0 100% 5 Assessors 0 40% 50% 10% 100% 6 Moderators 0 40% 50% 10% 100% 7 Mentors 0 40% 50% 10% 100%

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Selection of Micro Financiers – Assumptions

The following guiding principles are recommended for selecting micro financiers

Note Assumption

a

Staff and managers were chosen in the ratio of 2 managers for 1 staff member 10% of the micro financiers to participate in the first year should be selected to develop the prototype We assumed that managers and staff would both have valuable feedback in terms of developing the training prototype

b

Staff and managers were chosen in the ratio of 2 managers for 1 staff member 15% of the micro financiers to participate in the first year should be selected to participate in the pilot The assumption is that both staff and managers need to be tested and give feedback in terms of the relevance of the training

material and delivery channels developed during the prototype

c

Staff and managers were chosen in the ratio of 2 managers for 1 staff member 75% of the micro financiers to participate in the first year should receive training during phase 1 of the project It is assumed that managers would have a greater impact on their organisation than a single staff member, and would pave the

way for their staff to receive training in the future (phases 2 and 3) During phase 1, the training developed during the prototype and pilot stages will be delivered to both managers and staff to

check the functionality on a larger scale

Guiding Principles 75% of the participants during the first year will be consumer micro financiers, as they make up the majority (in terms of numbers) of micro

financiers in the industry The remaining 25% of participants will be taken from SMME lenders in order to maintain focus by developing two curricula for the first phase 67% of participants will be managers, as they are assumed to have the greatest impact on their organisations and all courses are applicable to

managers

Supporting notes to the following two slides:

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Selection of Micro Financiers – Consumer

In order to have a representative sample in the project pilot, both managers and staff need to be selected from the different types of micro finance institutions

A total of 150 managers and staff from consumer micro financiers will participate in the first year of the Micro Finance Skills Project

A total of 150 managers and staff from consumer micro financiers will participate in the first year of the Micro Finance Skills Project


# Participants 10 Managers 5 Staff a 15 Managers 7 Staff b 75 Managers 38 Staff c

Selection Criteria

Registered with the MFRC Based in Johannesburg Willing and committed to develop training

prototype Member of an association or franchise

Registered with the MFRC Based in Johannesburg and

selected provinces for testing purposes

Willing and committed to participate in the training pilot

Member of an association or franchise

Registered with the MFRC Based in Gauteng Willing and committed to undergo

training Member of an association or franchise

Reason for selecting

Test training prototype (course content and delivery channels) and ensure that it is aligned to consumer micro financiers’ needs

Micro financiers developing the prototype can ‘spread the word’ about the project and build awareness with colleagues

Test delivery and roll-out approach Test whether delivery channels are

functional outside of Johannesburg Give feedback to curriculum

developers on what works well and what needs improvement

Micro financiers selected from Gauteng for ease of coordination and cost containment during phase 1

Delivery of training to phase 1 micro financiers

Recommendations for the number of Consumer Micro Financiers to participate

a; b; c see previous “Selection Assumptions” slide

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Selection of Micro Financiers – SMME

In order to have a representative sample in the project pilot, managers and staff need to be selected from the different types of micro finance institutions

A total of 50 managers and staff from SMME lenders will undergo training in the first year of the Micro Finance Skills Project

A total of 50 managers and staff from SMME lenders will undergo training in the first year of the Micro Finance Skills Project

Recommendations for the number of SMME Micro Financiers to participate


# Participants 5 Managers 3 Staff a 8 Managers 4 Staff b 20 Managers 10 Staff c

Selection Criteria

Registered with the MFRC Based in Johannesburg Willing and committed to develop

training prototype Member of an association (e.g. Khula)

Registered with the MFRC Based in Johannesburg and selected

provinces for testing purposes Willing and committed to participate in

the training pilot Member of an association (e.g. Khula)

Registered with the MFRC Based in Johannesburg Willing and committed to undergo

training Member of an association (e.g. Khula)

Reason for selecting

Test training prototype (course content and delivery channels) and ensure that it is aligned with SMME micro financiers’ needs

Micro financiers developing the prototype can ‘spread the word’ about the project and build awareness with colleagues

Test delivery and roll-out approach Test whether delivery channels are

functional outside of Johannesburg Give feedback to curriculum

developers on what works well and what needs improvement

Undergo training to uplift skills

a; b; c see previous “Selection Assumptions” slide

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Next StepsThe following next steps must be completed for the prototype stage, pilot phase and phase 1 of the project


1. Approach associations and franchises asking for them to contact and put forward names of potential participants to assist with the development of a prototype

2. Contact potential participants and hold a briefing session describing roles, responsibilities, and expectations of them and the project

3. Develop the prototype with training providers and test with micro financiers

4. Participants to sign an agreement which outlines their role in completing the prototype development

1. Approach associations and franchises asking for them to contact and put forward names of potential participants to participate in the pilot phase

2. Contact potential participants and hold a briefing session describing roles, responsibilities, and expectations of their involvement in testing content and delivery channels across the country

3. Participants to sign an agreement which commits them to participating in the pilot

4. Test the training program with the pilot group of micro financiers and rectify any problem areas

1. Approach associations and franchises asking for them to contact and put forward names of potential trainees

2. Contact potential trainees and hold a briefing session describing roles, responsibilities, and expectations

3. Participants to sign an agreement which commits them to undergoing training

4. Roll out training to consumer and SMME micro financiers

93

Selection Criteria – Training Providers

Since few micro finance specific training providers exist, potential providers must be able to tailor existing materials to suit the industry’s training needs

Videos

CD - ROM

On-the-job training

Computer based training

Geographical reach

Workshops

Textbooks and manuals

Electronic communication

Registration

Criteria Reasons

Intend to register with BANKSETA ETQA if not already accredited*

Quality measures automatically in place Required by BANKSETA

Multiple delivery channels

Different courses/modules require different delivery channels

Providers must either currently have multiple channels or capacity to develop them

Geography Ability to deliver training to all provinces

Learner records and training reports

Trainers will be required to keep records of learners

Trainers will need to deliver training feedback reports

Sound training track record Check general training credentials Identify any past micro finance experience, where

applicable

Ability to develop micro finance specific training in conjunction with micro financiers

Few providers currently train micro financiers Training needs to be relevant to micro financiers

and will need to be developed by consulting with micro financiers

Criteria for selecting training providers to participate in phase 1 of the Micro Finance Skills Project

Examples of criteria for selecting training providers

*This has been identified as a gap in the capacity plan

94

Selection of Training Providers- Scoring Model

Training providers could be assigned a score according to the number of criteria that they meet

Accreditation Micro Finance Experience Skill Areas

Criteria Score Criteria Score Criteria Score

Accredited with ETQA

Not accredited but will meet criteria

5

2

Has experience training micro financiers

Has experience in generic skills

Has no experience yet

5

2

0

Has experience in 10-14 skill areas

Has experience in 5-10 skill areas

Has experience in less than 5 skill areas

5

2

0

Channels Geography

Criteria Score Criteria Score

Uses all key channels frequently

Has capacity to use all key channels

Does not have capacity to develop key channels

5

2

0

Trains in all provinces

Can train in all provinces

Cannot train in all provinces

5

2

0

Max Score = 25

Score Received = 11

% Received = 44%

75-100% = Highly Recommended50-75% = Recommended25-50% = Requires improvement before consideration0-25% = Not recommended for further consideration

Example of Score Received Interpretation of % Received

5 = highest possible score

2 = medium score

0 = lowest possible score

Definition of Scores

The above illustration is for trainers who will be providing micro finance specific training. A similar scoring model could be developed for other trainers

The above illustration is for trainers who will be providing micro finance specific training. A similar scoring model could be developed for other trainers

Illustrative

95

Training Provider Capacity Profile

The following areas were tested by the profile: Accreditation with an Education & Training Quality Assurance (ETQA) body Provinces that could receive the training Current courses offered Training delivery channels (current and future) Relevant past experience (references)

The following sources were used to identify training providers (96 in total): BANKSETA Expression of Interest Advert (Saleem Sheik) List of Accredited Training Providers (Frank Groenewald) Project stakeholder list (Accenture) National HR & Training Directory

Response rate: A total of 96 training providers received the profile forms via emailed 37 training providers completed the survey and returned it The response rate was 39% According to Markinor, a response rate of 20% for electronic surveys is considered

a good response

An electronic profile form was sent to 96 training providers for them to complete, in order to understand their current capacity

The response rate was double the rate the market researchers consider to be good for electronic surveys

The response rate was double the rate the market researchers consider to be good for electronic surveys

96

Capacity Plan – Capacity Building Required

A number of gaps were identified in the training providers’ capacity, and providers will need to undergo capacity building where required

Capacity gap Capacity building required

Only 5 % of training providers are currently accredited with the BANKSETA ETQA

The BANKSETA requires training providers must qualify for accreditation with the BANKSETA

Training providers will have to apply to the BANKSETA and register as accredited training providers

Not all of the skill areas tested receive a significant amount of training providers’ focus

Training in the finance industry has not had a focus on micro finance-specific skills to date New materials may have to be developed that are relevant to micro financiers Training providers will need to develop micro finance-specific training materials during the

prototype and test these with micro selected financiers

Traditional, paper-based training delivery is most frequently used by the profiled training providers

Many of the modules identified by the curriculum framework require hi-tech, electronic delivery channels

Training providers that do not have the required channels will have to develop them in order to be selected as providers of training to the project

One way of doing this is by forming an alliance with another company that has the required channel, as opposed to developing the channel from scratch

In addition to the gaps identified by the electronic profile, training providers will also need to track learner participation and provide feedback on training delivered, as part

of a formal assessment and feedback process

In addition to the gaps identified by the electronic profile, training providers will also need to track learner participation and provide feedback on training delivered, as part

of a formal assessment and feedback process

97

Capacity Plan –Accreditation and Micro Finance Experience

Only 43% of training providers are accredited with an ETQA and 5% are accredited with the BANKSETA. Micro finance training experience is limited

Training providers will eventually be accredited with the BANKSETA ETQA and micro finance specific training will be developed, so these are not limiting factors

Training providers will eventually be accredited with the BANKSETA ETQA and micro finance specific training will be developed, so these are not limiting factors

Services SETA ETDP SETA BANKSETA HEQC SETA ISETT Total

# Accredited Providers

8 3 2 2 1 16

Number of Training Providers Registered with an ETQA

1. A total of 16 training providers (43%) are registered with an Education and Training Quality Assurance body (ETQA)

2. 10 training providers (27%) are in the process of becoming accredited

3. 11 training providers (30%) are not accredited with an ETQA

# of Providers who have offered training # of Micro Finance Specific Courses Offered

14 76

Experience of Training Providers in the Micro Finance Industry

1. A total of 14 training providers (38%) have offered specific micro finance training

2. In total, these 14 training providers have offered 76 micro finance specific courses

98

Capacity Plan –Skill Areas

For each skill area tested, at least one training provider responded that they focused much of their time on that skill area

The content of the existing training material must be assessed for relevance to the micro finance industry

The content of the existing training material must be assessed for relevance to the micro finance industry

% of Trainers’ Focus*

Client service

Funding strategy

Business

strategyFinance

Staff mgt

Marketing Risk mgt

SMME financing

Loan book mgt

Cash mgtService

providersComplaint procedures

Client admin

Legal & regulatory

75-100% 5 6 6 4 3 5 3 3 4 3 2 2 1 1

50-75% 11 6 5 7 7 4 6 5 4 4 4 4 3 1

25-50% 5 8 10 14 14 10 9 9 9 12 9 7 9 12

0-25% 10 8 8 5 6 9 10 7 10 8 7 14 14 14

No response

6 9 8 7 7 9 9 13 10 10 15 10 10 9

% scores >= 50%

43% 32% 30% 30% 27% 24% 24% 22% 22% 19% 16% 16% 11% 5%

Frequency of scores achieved by training providers

*Focus refers to the amount of time spent developing materials and delivering training in each skill area

Some skill areas have a number of training providers who currently focus on them

However, some skill areas have very few training providers who currently focus on them

< 20% of training providers focus on these skill areas

99

Capacity Plan –Delivery Channels

Traditional, paper-based training delivery is most frequently in use, and electronic channels will need to be developed by many training providers

Training of the different modules will not be hampered as training providers indicated that they have the capacity to develop all the channels identified for

training delivery

Training of the different modules will not be hampered as training providers indicated that they have the capacity to develop all the channels identified for

training delivery

Summary of weighted average scores by channels used3.76

3.413.22

2.762.65

2.492.32 2.27 2.22 2.14 2.08

1.81 1.731.62

1.27

0

1

2

3

4

Man

uals

Classr

oom

Wor

ksho

ps

Semina

rs

Coach

ing

Men

torin

g

Simula

tion

Electro

nic m

anua

ls

Videos

Compu

ter b

ased

train

ing

Distan

ce le

arnin

g

Electro

nic in

form

ation

exc

hang

e

Inte

racti

ve m

ultim

edia

Web

-bas

ed tr

aining

Busine

ss T

V

Sco

re

Capacity gap

1. The score was calculated as a weighted average of the responses

1 = not currently in use2 = not currently in use but have capacity3 = currently in use sometimes4 = currently in frequent use

2. All areas in the dotted oval represent a deficit in terms of the capacity of training providers to utilise them as delivery channels

3. The channels where a gap currently exists represent hi-tech, electronic channels. This may pose a problem where these channels have been identified as the primary means of delivering training in a particular module

4. There are no channels where training providers have no capacity to develop them should their be a need

100

Capacity Plan –Geography

The training providers surveyed have the capacity to train micro financiers in all the provinces

There is no gap in terms of where the trainers are able to deliver trainingThere is no gap in terms of where the trainers are able to deliver training

Summary of provinces that trainers are able to provide training in

1. The Free State, Northern Province and Northern Cape are the most isolated provinces, but more than half the training providers said they are able to deliver training there

2. Most trainers said they are able to delivery training in the Western Cape, Gauteng and Kwazulu/Natal

3. 59% of the trainers said they can provide training in all 9 provinces

ProvinceAll

provincesWestern

CapeGauteng Kwazulu Mpumalanga

Eastern Cape

North Western Province

Northern Cape

Northern Province

Free State

# Training Providers

22 28 27 27 26 25 24 24 24 22

% of Sample 59% 76% 73% 73% 70% 68% 65% 62% 62% 59%

High representation of trainers

Medium to high representation of trainers

Medium representation of trainers

% of trainers able to train micro financiers by province

62%

76%68%

59%

73%

62%

65%70%

73%

101

Next Steps


1. Advertise project in national publications

2. Invite trainers to submit proposals and attend a briefing session

3. Modify and apply the BANKSETA procurement process to select the final trainers

4. Decide upon number and structure of training providers based on options provided

5. Trainers to sign a contract with the BANKSETA

6. Develop and test (with micro financiers) the content and delivery channels for training

7. Training providers to undergo ‘capacity building’ where necessary

1. Deliver training to pilot group

2. Test whether training content functions properly through the identified channels

3. Understand what works well and what needs improvement

4. Finalise training content and delivery

1. Deliver training to micro financiers

The following next steps must be completed for the prototype stage, pilot phase and phase 1 of the project

102

Agenda









103

Implementation Best Practice ApproachBest practice implementation includes the design, building, testing and deployment of a new business solution in a series of incremental releases

Mobilisation

Implementation

Experiments

Implementation

Early, Focused

Investigation

DESIGN IMPLEMENTATION

Experiments

Implementation

Focused Investigation

Experiments

Implementation

Focused Investigation

DEVELOPMENT

PROTOTYPE PILOT ROLL OUT

Illustrative

Communication

Project Management

Detailed design

Parallel execution of design, capability diagnosis and development results in a solution that is more likely to be innovative and differentiated

Parallel execution of design, capability diagnosis and development results in a solution that is more likely to be innovative and differentiated

104

Recommended Implementation Approach

Month 1 Month 2 Month 3 Month 4

Select trainers

BD

S S

olu

tio

n

Cu

rric

ulu

m

Select micro financiers for prototype

Month 5

Prototype: Resource centre

Roll Out : Resource

centre

Pilot: Resource

centre

High level design: 1st tier

Service Providers

Protype: 1st tier SPs

Roll out: 1st tier SPs

Pilot : 1st tier SPs

Detailed design of curriculum, including the development of skills programmes within the curriculum

Pilot: Training Program

Prototype: Training Program

Roll Out Phase 1 Training Program

Key decisions

Detailed design of BDS resource centre

Communication

Project Management

PROTOTYPE PILOT ROLL OUT

Select micro financiers for

prototype

Select micro financiers for

roll out

DETAILED DESIGN

Consultative Forum Sessions

Ag

ree

wit

hfi

nd

ing

s a

nd

re

co

mm

en

da

tio

ns

105

Issues and risksSome of the issues and risks which the implementation programme will face includes:

Issues and Risks Mitigating Actions

Failure to make key decisions Strong, high level sponsorship of the project is requiredWhere possible, critical decisions must be made prior to initiation of

project

Dependencies on other projects e.g. Unit Standards Programme Marketing and PR Programme

Upfront identification of all dependencies is essentialClear understanding of the nature of dependency is requiredDependencies to be incorporated into the project plan and timeframes

Lack of momentum for the duration of the project

Strong, high level sponsorship of the project is requiredMinimal deviations from project plans and timeframes should be allowed Regular communication sessions should be held with all stakeholders

Stakeholder disenchantment with programme

Regular communication sessions should be held with all stakeholders, detailing

Project approach Progress Estimated completion Issues, risks, constraints Key decisions to be made etc.

106

Next Steps

Curriculum Findings and recommendations must be agreed to before proceeding further The Consultative Forum and a group of micro financiers need to be involved in reviewing the recommendations further Trainers and micro finance test groups to be assessed and selected Legal contracts and agreements to be drawn up Communication program to be conducted to all involved stakeholders Training content and delivery methods to be developed and then tested through prototype and pilot

BDS Centre The Consultative Forum and a group of micro financiers need to be involved in reviewing the BDS recommendations

further Business case for BDS solution to be developed Critical “pre-project decisions” to be made

• Who will sponsor of the project?• Who will finance the project?• Who will be accountable for the project?• Who will be the involved parties in the BDS solution?• Who will manage the various components of the BDS solution?• Will current infrastructure be utilised, or will new infrastructure be developed?

Project to be launched

The curriculum and BDS projects are currently at different stages in their development, thereby requiring different immediate actions

The BDS decisions should be made as soon as possible, so that an integrated approach to delivering the two initiatives can be achieved

The BDS decisions should be made as soon as possible, so that an integrated approach to delivering the two initiatives can be achieved

107

Agenda









108

Breakout Instructions

Break-away 1

Group 1 - Curriculum framework – skills transfer, delivery and learners

(H.Watson/ Accenture)

Group 2 - Business Development Support (Accenture)

Group 3 - Selection (Accenture)

Break-away 2

Overall project approach and objectives, including scope and beneficiaries

(S.Babb/ SDS Consortium)

109

Breakout Instructions

Break-away 1

1. Review details of Accenture presentation pack

2. Provide input and recommendations for assignments as per instructions

3. Ask questions

Break-away 2

1. Review the overall Micro Finance Skills Project approach and objectives

2. Provide input to scope and beneficiaries of the project

3. Ask questions

Be an active participant!

110

BDS Breakout Objectives

Agreement on BDS definition

Agreement on BDS success criteria

Review on recommended BDS model

Discussion on roles and responsibilities of BDS roleplayers

Review of next steps for BDS solution

111

BDS Facilitator Guide

Setup We have organised proxima’s for each room – please take your laptop

Please make sure the you have the copy of the breakout session presentation loaded up and

have written the objectives down on a flipchart

Prepare 3-4 questions per objective, and id relevant slides per objective for you to review

Session Introduce yourself

Review the overall objectives I.e. information sharing!!!!

Review the list of objectives for your particular session

Begin at the first one and summarise our findings using the slides

Prompt the audience by asking your questions

Write down their input and move onto the next objective

Hide slide

112

Curriculum Framework Breakout Objectives

Review and agree curriculum skill areas

Agreement on the prioritisation of skill areas

Review delivery channels and methods

Provide input to the proposed strategy for the delivery of training

materials

Provide input to the next steps for the Curriculum Framework

113

Selection Breakout Objectives

Provide input to the proposed selection criteria

Training providers

Micro financiers

Individual learners

Review training provider capacity profiles

Provide input to the approach for the prototype, pilot and phase 1

sections

The END

Design Phase Executive Summary 9 May 2002 DESIGN PHASE EXECUTIVE SUMMARY MAY 2002.

Documents

Transcript of Design Phase Executive Summary 9 May 2002 DESIGN PHASE EXECUTIVE SUMMARY MAY 2002.