Technical Assistance Consultant’s Report...This report covers Gender Responsive Microfinance...

Technical Assistance Consultant’s Report

Project Number: 37402 January 2007

RETA 6143: Technical Assistance for Promoting Gender Equality and Women's Empowerment (Financed by the Gender and Development Cooperation Fund)

Prepared by Azerbaijan Micro-finance Association (AMFA) Baku, Azerbaijan

This

consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and e Government cannot be held liable for its contents. (For project preparatory technical

nce: All the views expressed herein may not be incorporated into the proposed project’s design. ADB and th assista

RETA 6143 PROMOTING GENDER EQUALITY AND WOMEN’S EMPOWERMENT

GENDER RESPONSIVE MICROFINANCE

Prepared by Azerbaijan Micro-finance Association (AMFA)

Statements appearing in the publication are made on the responsibility of authors alone and may not reflect the views and policy of ADB or the Board of Governors or the Governments represented by them. ADB does not guarantee exactness of report’s data and is not responsible for its use.

Azerbaijan Micro-finance Association (AMFA)

____________________________________ 40, Jafar Jabbarli Street, Caspian Business Center, Baku, Azerbaijan

Tel: +994 12 437 1645; Fax: +994 12 437 2339 e-mail: [email protected]; website: www.amfa.az

GENDER RESPONSIVE MICROFINANCE

FINAL REPORT

This project was implemented by Azerbaijan Micro-finance Association (AMFA) with funding support of Asian Development Bank.


____________________________________ 40, Jafar Jabbarli Street, Caspian Business Center, Baku, Azerbaijan

Tel: +994 12 437 1645; Fax: +994 12 437 2339 e-mail: [email protected]; website: www.amfa.az

TABLE OF CONTENTS

Glossary 2 Acknowledgements 4 Background information 5 Executive Summary 6 Methodology 7 Chapter One: Institutional Gender Strategy Analysis 9 Chapter Two: Recruitment and trainings 12

Chapter Three: Monitoring of efficiency of recruited staff 15 Conclusions and Recommendations 17 Bibliography 19 Annexes 20 1. Skills for successful loan officers 2. Co-operation requirements 3. Institutional Gender Policy Assessment Questionnaire 4. Monitoring Questionnaire


GLOSSARY Current portfolio: The outstanding value of all loans that do not have any instalment of principal past due. It does not include accrued interest.

Gender: It refers to the array of socially constructed roles and relationships, personality traits, attitudes, behaviours, values, relative power and influence that society ascribes to the two sexes on a differential basis. Whereas biological sex is determined by genetic and anatomical characteristics, gender is an acquired identity that is learned, changes over time, and varies widely within and across cultures. Gender is relational and refers not simply to women or men but to the relationship between them.

Gender Equality: It entails the concept that all human beings, both men and women, are free to develop their personal abilities and make choices without the limitations set by stereotypes, rigid gender roles, or prejudices. Gender equality means that the different behaviours, aspirations and needs of women and men are considered, valued and favoured equally. It does not mean that women and men have to become the same, but that their rights, responsibilities and opportunities will not depend on whether they are born male or female.

Gender mainstreaming: Mainstreaming a gender perspective is the process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in any area and at all levels. It is a strategy for making the concerns and experiences of women as well as of men an integral part of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres, so that women and men benefit equally, and inequality is not perpetuated. The ultimate goal of mainstreaming is to achieve gender equality.

Mainstreaming includes gender-specific activities and affirmative action, whenever women or men are in a particularly disadvantageous position. Gender-specific interventions can target women exclusively, men and women together, or only men, to enable them to participate in and benefit equally from development efforts. These are necessary temporary measures designed to combat the direct and indirect consequences of past discrimination.

Loan officer: The term refers to field personnel or line officers who interact with the client, not to administrative staff or analysts who process loans without direct client contact. Loan officers include contract employees who may not be part of permanent staff, but are contracted on a regular basis in the capacity of loan officers. Number of active clients: The number of individuals who are active borrowers, depositors, and other clients who are currently accessing any of the MFI’s financial services. Individuals who have multiple loans or accounts with an MFI

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should be counted as a single client. Individuals who are not currently receiving any service directly from the MFI are not included, such as those with facilitated savings. Number of clients: The total number of active clients plus the number of individuals who are neither active borrowers nor depositors, but who remain members or are otherwise using the services of an MFI. These are often referred to as members. This could include clients with only facilitated savings. Number of loans disbursed: The number of loans disbursed during the period. For MFIs using a group-lending methodology, the number of loans should refer to the number of individuals receiving part of a group loan, unless the MFI specifies a different definition. Number of loan officers: The number of personnel whose main activity is to directly manage a portion of the gross loan portfolio. A loan officer is a staff member of record who is directly responsible for arranging and monitoring client loans. The number of loan officers is reported on a full-time-equivalent basis. Number of personnel: The number of individuals who are actively employed by an MFI. This number includes contract employees or advisors who dedicate the majority of their time to the MFI, even if they are not on the MFI’s roster of employees. This number should be expressed as a full-time equivalent, so that any advisors who spend 2/3 of their time at the MFI would be considered 2/3 of a full-time employee. Number of loans outstanding: The number of loans that have been neither fully repaid nor written off, and thus comprise part of the gross loan portfolio. For MFIs using a group-lending methodology, this term includes every individual who is responsible for repaying a portion of a group loan, unless another definition is specified. Portfolio at risk (PAR): The value of all loans outstanding that have one or more instalments of principal past due more than a certain number of days. This item includes the entire unpaid principal balance, including both past-due and future instalments, but not accrued interest. PAR is usually divided into categories according to the amount of time passed since the first missing principal instalment.


ACKNOWLEDGEMENTS

Contributions and support from many organizations and individuals made it possible to conduct this research and develop project on Gender and Microfinance in Azerbaijan. We extend our sincere appreciation to the Asian Development Bank (ADB). This project could not have been implemented without their financial support and technical assistance. In this regard, we extend special gratitude to Ms. Noy Siackhachanh, Ms. Betty Wilkinson, Ms. Lu Shen, Mr. Matthew Westfall, Mr. Rafael Abbasov, Ms. Lala Hajibayova, Ms. Lydia B. Lerum, Aelim Chi, Mr. Nenita C. Tagasa and Lennie R. De Sagun. We extend our gratitude for cooperation, participation and valuable input in the project to the ADRA Credit, AzeriStar, CredAgro, Dayag Credit, Finance for Development, Komak Credit Union, Madad Azerbaijan, Microfinance Bank of Azerbaijan, Nakhchivan MicroCredit, Normicro, Shore Overseas Azerbaijan, UMID Credit, Viator Microcredit and World Vision AzerCredit. Special thanks to staff employed in the branch offices for their timely assistance in monitoring activities. We are grateful to the director and trainers of Gender Research Centre (GRC) for their professionalism, dedication, and hard work in conducting Gender Sensitivity and Gender and Microfinance trainings. For enormous assistance in carrying out Training on Crediting, we thank Russian Microfinance Centre (RMC).

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BACKGROUND INFORMATION

Microfinance provides financial services to millions of the world’s poor. Access to financial services enables the poor to increase income and smooth consumption flows, thus expanding their asset base and reducing their vulnerability to the external shocks that plague their daily existence. Impact studies show that in many cases, microfinance reduced poverty through increasing income levels. Studies also show that microfinance has resulted in improved healthcare, children’s education and nutrition, and women’s empowerment. In particular, the ability to borrow, save, and earn income reduces economic vulnerability for women and their households. Because a lot of microfinance clients are women, the terms women and gender are often used interchangeably. This overlooks the distinction between what is biologically determined and what is socially, psychologically, historically and culturally learned. Gender refers to recognizing the position of women in relation to men as actors in society—in the context of husbands and families, local community and, more broadly, women’s position in society at the national level as governed by laws and custom. In the discourse of microfinance, gender refers to examining the obstacles women face in these relationships, which prevent them from maximizing the benefits of microfinance services. In recent years, the sector has been pushing new frontiers, evolving in search of ways to better serve the needs of the poor. This includes efforts to more clearly define the intersection of gender and microfinance and to develop products and services that meet women’s ongoing needs in a sustainable fashion. At the same time gender mainstreaming not only entails an analysis of gender equity at the programme or service level, but also looks at how gender equity is permeated through the organizational structure and culture. Microfinance sector in Azerbaijan also joins to the global initiative regarding gender mainstreaming. In the overall, the activities of MFIs in Azerbaijan contribute to the economic development within the framework of poverty reduction strategy, enterprise development and raising living standards of the population. Currently, altogether, MFIs in Azerbaijan cover about 54 regions out of 66. The number of active clients is more than 78,711. So far, MFIs in Azerbaijan have contributed to poverty reduction in the regions by provision of microfinance loans exceeding $265,137,852 to its vulnerable population. In total, female participation in microfinance rates up to 39% of all clients1. This indicator is growing comparing to the previous years. Although a considerable number of women have successfully accessed micro credit through the sector, the scope for expanding such access especially in rural areas and support women in establishing SME’s is considerable.

1 All statistics presented in the paragraph refer to Azerbaijan Micro-finance Association’s Matrix, June 2006

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EXECUTIVE SUMMARY This report covers Gender Responsive Microfinance project financed by Asian Development Bank and carried out by Azerbaijan Micro-Finance Association from July 2005 to July 2006. Its main objective was to increase the level of institutional gender awareness and participation of women in microfinance institutions as field staff for improvement of access of women client to the industry. A survey conducted among fifteen institutions providing microfinance services showed that overwhelming majority of organizations don’t have clear gender policy, however they are planning or considering to adopt one. In the result of discussions with MFIs management, consultations with loan officers and clients and general observations it was possible to identify skills for successful female loan officers. These criterias were widely used during selection of female loan officers. In total eighteen persons were recruited in the framework of project. The report presents information on trainings provided to recruited females and other MFIs to raise their gender awareness and enhance crediting knowledge. Selected females are offering credit services in different regions of the country, such as Davachi, Ganja, Guba, Khachmaz, Mingachevir, Nakhchivan, Sabirabad, Shamkir, Sheki, Sumgayit and in the capital. Training manual for MFIs specialists of Human Resources department was developed in co-operation with Gender Research Centre (GRC). The manual includes main gender concepts, gender equality, perspectives of female involvement into micro-financing, approaches in management of personnel in micro-finance sector and many other topics. According to conducted monitoring of loan officers performance, managers and supervisors of microfinance institutions are satisfied with the work of new employees. They noticed increase of their professional knowledge and made suggestions for further improvement. At the same time, staff satisfaction was thoroughly examined and it was revealed that recruited loan officers are pleased with their work and want to continue with institutions. They also provided number of recommendations on enhancement of their work and conditions that were later discussed with management. Principal result is that in majority of institutions number of female clients increased with the recruitment of female loan officers. This process is expected to be continued in other organizations as well. Based on the project findings, AMFA has developed recommendations on gender strategy concerning improvement of existing administrative and staff policy that incorporates some new measures which would provide further opportunities for the women staff and clients.


METHODOLOGY

Introductory message was sent to MFIs (members and non-members of Azerbaijan Micro-finance Association) and banks. Information was disseminated on launching of the project, its objectives and benefits. Afterwards, separate meetings were organized with managers of institutions to discuss project in details. Once verbal agreement reached, specially developed cooperation requirements, describing foreseen contributions from both sides were sent to MFIs to be accepted. As a result thirteen institutions took written commitment in full project participation and two in partial participation2. Participated organizations included ADRA Credit, AzeriStar, CredAgro, Dayag Credit, Finance for Development, Komak Credit Union, Madad Azerbaijan, Microfinance Bank of Azerbaijan, Normicro, Parabank, Shore Overseas Azerbaijan, UMID Credit, Viator Microcredit and World Vision AzerCredit. Target regions were identified according to majority of MFIs presence. All organizations assigned focal point responsible for coordination of project matters with AMFA. In order to inform relevant partners and public about commencement of the project, AMFA hosted press conference for twenty local media representatives (both printed and TV). Objectives and peculiarities of the project were presented both by AMFA and ADB. Following an earlier expertise, reference materials on microfinance sector, including, national policies, legal basis, institutions’ statute and general functioning of MFIs were compiled and analysed. In addition, MFIs were requested to provide information on institutional profile, especially location of offices, geographical area of operations, number of active clients in rural and urban areas, average loan size for male and female clients and female borrowers. In order to assess availability of institutional gender strategy, questionnaire was designed and distributed. Information was collected and evaluated on availability of gender policy; assessment of gender programming; institutional structure in terms of female personnel hiring, positioning and promoting; organizational culture, i.e. whether organization is considered to be gender friendly; markets and clients in regard to approaching female clients and general attitude towards female credit officers. AMFA made visits to selected regional offices, met with loan officers to assess their terms of reference, employment conditions, work satisfaction and main concerns. As a supportive tool in identification of skills for successful female loan officers, AMFA obtain list of recently resigned female loan officers, made random selection and organized informal meetings with them. 2 Two institutions didn’t take commitment to recruit loan officer due to their limited financial capacity.

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Once collected information was completely assessed, recommendations on necessary changes and additions to existing rules, as well as strategies, implementation procedures and selection criteria for female loan officers were developed and submitted to MFIs for revision and adoption. In parallel, search and selection of available training institutions able to provide qualified gender related training were ensured. Second phase of the project mainly consisted of recruitment and training of loan officers. MFIs were assisted with drafting job advertisement, indicating identified qualifications necessary for successful female loan officers. AMFA was also involved in selection of applications and interview process. To the time of recruitment, special gender sensitization training program was developed and offered immediately after recruitment and general orientation training. Monitoring of work efficiency of the recruited staff included guidance and counselling once required by MFIs. For this, constant contact with organizations and loan officers were maintained. AMFA repeated visits to regional offices to have discussions with local staff and clients on their assessment of loan officers’ work. Loan officers themselves were interviewed in separate to get their estimation of work, encountered problems, concerns and future plans.

CHAPTER ONE: INSTITUTIONAL GENDER STRATEGY ANALYSIS

Gender responsive microfinance is about making microfinance gender-sensitive, considering the needs and constraints of both men and women when designing and delivering finance. In the context of Gender Responsive Microfinance Project implemented by AMFA and financed by ADB, the objective of a gender-sensitive approach is to ensure that job offered for credit officer’s position and finance provided to clients are just as attractive to women as it is to men. Being gender-sensitive is recognizing that men and women have different needs and priorities which evolve over time. Financial institutions must assess this changing reality and adjust accordingly. It shall be also stressed out that women-targeted finance programs are not gender-sensitive since they exclude men. Women’s empowerment is an important positive additional benefit of targeting poor women through microfinance. In planning and implementation, the targeting of women shall be carefully considered in the cultural context, which plays a considerable role in determining how women can be reached and attracted into a program. Furthermore, gender shall be considered in the management of a microfinance intervention – both in terms of program staff and within client groups, where women should be fairly represented in relation to their participation in the program. Formulation of comprehensive gender policy is one of the specific measures to deal with gender gap that exists in MFIs. The Gender Strategy, based on principles of equity and equality, will help MFIs integrate and institutionalize gender equity goals and objectives both organizationally and into all its activities. Strategy suggested in this document is an improvement upon the existing administrative and staff policy and it incorporates some new measures which would provide further opportunities for the women staff and clients.

Institutional Gender Analysis of MFIs

In order to identify gender sensitivity level of institutions special questionnaire was developed and submitted to the project participants (13 Micro-finance Institutions, 2 banks and 1 Credit Union). Analyses revealed that twelve out of fifteen organizations don’t have clear gender policy, however overwhelming majority of these organizations are planning or considering to adopt one. As there is no gender policy, there are no special financial resources allocated for implementation of gender related activities (except for Micro Finance Bank of Azerbaijan). Chart 1. Availability of institutional

gender policy

20% YesNo

80%

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Half of the organizations conduct its monitoring, evaluation and strategic planning in a gender sensitive manner. Only few MFIs (AzeriStar, Finance for Development, Nakhchivan Microcredit and Viator) perform an assessment of gender programming and document the work implemented to promote gender equity within institution and the community in which they operate. In all institutions men and women receive equal wages for equal work. In five organizations new staff is selected on the basis of gender sensitivity and capacity to deal with gender issues in practical terms. Several MFIs discuss gender issues during performance appraisal interviews. Encouraging result is that half of the participants succeeded to increase gender expertise among their staff members through consultations or trainings. Overwhelming majority states that gender fit into the image of their organizations and both female staff and beneficiaries consider organizations to be woman friendly. Nine institutions indicated that gender is taken seriously and discussed openly among their staff. However, mechanism for coordination, consultation and organizational gender learning between various parts of the organization (both horizontally and vertically) exists only in five MFIs. Total number of female staff employed in participating organizations is 214 that make approximately 30 per cent of total employees. Out of these number 37 (17%) work at the managerial positions and half of them have specific gender expertise and responsibilities. It is interesting to mention that although average percentage of female loan officers constitute only 10 per cent of total loan officers3, majority of organizations stated that they didn’t experience serious constraints in reaching female clients. However, estimations indicate that average percentage of female borrowers in participating institutions is 35 per cent, which in itself is not so significant figure. Positive fact is that in twelve out of fourteen organizations promote hiring of female loan officers by stating about preference of female candidates in job advertisements and giving actual preference in selection of a candidate. One MFI carried out awareness building in women community about possibility of hiring female staff. Those MFIs that have female loan officers ensure their promotion and career development through workshops, trainings and work on development of skills with further assignment of some managerial functions. Among obstacles in finding, hiring and retaining female staff the organizations mentioned peculiarity of loan officer’s work, i.e. frequent field visits and work overtime, cultural barriers to travel alone to sites, closed social environment, insufficient skills and knowledge in the regions, low offered salary due to limited financial resources. At the same time, advantages and disadvantages of having female loan officers were analyzed and are presented in Table 1 and 2. 3 Nine institutions don’t have female loan officers at all.

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Table 1. Advantages

№ Reasons Number of responses

Percentage

1. Easy contact with female clients 11 73 % 2. Possibility to increase female

borrowers 6 43 %

3. Positive impact on work environment / better atmosphere in the office

5 36 %

4. High productivity and work efficiency 2 14% Table 2. Disadvantages

№ Reasons Number of

responses Percentage

1. Reluctance to go for frequent field visits

4 28 %

2. Family situation reflected on the work

2 14 %

3. Limited skills and knowledge in the regions

1 7 %

4. Problems with male clients 1 7% 5. No disadvantages 6 40%

Organizations also mentioned different objectives for working with women clients among which are increase of number of female managed businesses; contribute to the empowerment of women in the society; establishment of gender equality in the families and work; and guarantee of social impact to livelihood of children. In addition, it was several times indicated that women clients are more accurate in returning credits and therefore targeting them is very beneficial. These responses indicate sufficient understanding and appreciation of women role in the society. Organizations disseminate information about their services to potential female clients through active clients, site visits, information sharing meetings with community representatives, advertisements and leaflets. All data collected by organizations is broken down by gender in ten organizations, which create possibility for better analysis.

CHAPTER TWO: RECRUITMENT AND TRAININGS

According to the workplan recruitment of up to 20 female credit officers was expected and in fact MFIs employed 18 persons. For this purpose, advertisement was developed by MFIs in coordination with AMFA and placed in local newspapers and websites. At the same time information about the vacancy was distributed through branch offices and clients applying to the institutions. In some cases vacancy information was spread through other MFIs represented in neighbouring regions and public organizations dealing with women’s issues. Selection criterias were based on the developed recommendations about essential characteristics of successful loan officers. However, each organization was giving preferences to different characteristics vital for specifics of their work. Selection process in some regions was problematic in some regions due to limited number of females interested in this job and availability of necessary qualifications. Therefore, recruitment in these regions was postponed and carried out on the later stage. MFIs collected and scrutinized resumes and conducted selection interviews. AMFA participated at the interviews with short-listed candidates and made recommendations during the decision making process. Selected candidates represented different age groups, educational and professional backgrounds. Special attention was made to personality features, taking into consideration peculiarities of the fieldwork. MFIs provided new employees with orientation and necessary documentation. Selected females started to offer credit services in different regions of the country, such as Davachi, Ganja, Guba, Khachmaz, Mingachevir, Nakhichevan, Sabirabad, Shamkir, Sheki, Sumgayit and in the capital.

Besides general orientation provided by organizations on crediting rules and procedures, AMFA organized additional trainings to enhance capacity of newly recruited staff. These trainings included Gender Sensitivity and Crediting. In order to make proper selection, AMFA met number of training institutions and individual trainers specialized on gender issues.

Gender Sensitivity Training. Baku, December, 2005

After the assessment, GRC Gender Research Centre was selected to develop training program, allocate trainers and provide training participants with distribution materials. The GRC unites scientists and lecturers who develop gender approach in different economic, social and humanitarian disciplines.

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AMFA provided general concept of the requested training and then approved training program submitted by GRC. Agenda of the training was preliminary distributed among participants. Intern was invited to provide logistics assistance during this and following trainings. The one-day event was held twice on 26 and 27 December 2006 in International Press Centre. Supportive documents, consisting of gender and micro-finance glossary, main gender theoretical concepts, Millennium Development Goal 3, gender component in the State Poverty Reduction Program etc. were copied and distributed to the participants. Gender Research Centre allocated three trainers and one program development assistant. They presented information about basics of gender, sex and gender in Millennium Declaration and its Goals, gender balance, gendered division of labour in economics, gender aspect in profile of micro-finance market in Azerbaijan. Participants actively responded to the issues and shared their experience. At the end of the training all attendees appreciated the opportunity to learn useful information easy applicable in day-to-day life and at work.

Training on crediting. Baku, January, 2006

In the framework of project coordination meetings, managers of MFIs expressed the need in providing specialized training for newly recruited credit officers in order to equip them with necessary knowledge required at their position. Although abovementioned training was not foreseen by the project, ADB approved this initiative. Given its extensive experience in organizing microfinance related trainings and co-operation with leading training institutions, AMFA started negotiations with Russian Micro-finance Centre (RMC) that has sufficient experience in conducting such trainings. Content of training program was agreed with AMFA and included history of microfinancing; clients, products and services of MFI; peculiarities of services’ marketing; evaluation of risk factors; evaluation of collateral; pricing policy; financial reports; methods of microcredits express analysis; delinquencies and effective communication with clients. Three days training was organized on 11-13 January 2006 at Irshad Hotel. Participants were provided with training materials, synchronized translation, necessary stationary, food and accommodation in the hotel. RMC trainer, Ms. Ekaterina Butova, conducted pre-test to identify the level of participants and determine focus areas. Training methodology foreseen different interactive techniques, lectures, work in a group, presentations of participants, role games,

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discussions, conclusions over new topics based on previous experience and repetition of studied materials. After completion of the training participants filled out evaluation forms and expressed their opinion about the training. All trainees highly evaluated the proficiency of the trainer, methodology and content of the training and reference materials. Based on the acquired knowledge it was suggested to continue series of trainings on preparation of balance sheets, management of delinquencies, development of business plans, strategic marketing, management of information systems and client satisfaction. Last training offered in accordance with the workplan was Training of Trainers on Gender and Microfinance to HR personnel of MFIs. Given productive co-operation and previous experience with Gender Research Centre (GRC), the organization was again selected to assist with the training that was scheduled on 19 April 2006. In addition to assignments given during earlier training, GRC was tasked to develop of manual for trainers.

Gender and Microfinance Training. Baku, April, 2006

The main idea of the training was to equip the relevant staff with gender related knowledge to be transferred in future to other personnel. Therefore, training manual was supportive tool in reaching this objective. It includes main concept of gender (disclosure of gender theory, different roles, division of labour in the society, human rights etc.), analysis of gender and development (different approaches, main problems, analysing and planning of gender and development etc.), guide to trainer (preparations to training, generating audience interest, demand analysis, training content

development, training methodology etc.) practical games, training techniques. Recent gender related statistics and gender terminology was included as supplementary information. Training manual was printed and distributed to all training participants. Gender and Microfinance Training for HR managers was held on 19 April 2006. Agenda of the training included complex approach to gender balance, labour market division by gender, gender aspects of microfinance market in Azerbaijan and gender component in HR management of microfinance sector. Training was evaluated and results revealed that participants obtained necessary knowledge to conduct trainings independently.

CHAPTER THREE: MONITORING OF EFFICIENCY OF RECRUITED STAFF

Azerbaijan Micro-finance Association conducted series of field visits to carry out mid-term and final monitoring and assessment of effectiveness of newly recruited loan officers and at the same time identify their work satisfaction level. For this purpose special questionnaires were developed for supervisors and loan officers. Loan officers were also monitored on job, while directly working with client. Institutions provided extensive support in organizing monitoring in the regional branches. Supervisors and loan officers were interviewed in separate in order to ensure obtaining of unbiased opinions. Evaluation results received from institutions revealed that almost all managers of organizations are very satisfied with the work of loan officers, only one marked average satisfaction. Number of clients served per person varies from 25 to 800 individuals depending on the size of organization. In more than half of MFIs number of female clients increased with the recruitment of female loan officer, and in the rest the number remained the same. All loan officers significantly increased their professional knowledge, particularly it was noticed that trainings offered by the project made invaluable input. Relations with other staff and attitude of clients, especially males, towards new female loan officers are very positive. Loan officers who were already working in organization for a long time assisted new staff with induction. This accelerated the learning process and professional growth of new staff. Loan officers were working both with male and female clients, but in some organizations they were only specialized on serving female clients. Some loan officers conducted awareness raising in the regions and by this attracted sufficient number of new female clients.

Loan officer at work. Ganja, March, 2006

At the end of the interview, managers were asked about improvements that are necessary to make the work of female loan officers more effective. Main comments made were a) salary increase; b) training opportunities in e.g. MIS, risk management, market research, new product development, business plan composition etc. and c) exposure visits to other MFIs. However, majority of institutions mentioned that most important factor impeding efficiency and professional development of loan officers is limited portfolio. Recruited staff attracts significant number of new clients, but current portfolio does not allow expanding number of clients. It was recommended to assist in attracting foreign investors that can provide loans to small and well-expanded MFIs.

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In parallel assessment of staff satisfaction was explored. It was revealed that all of them are satisfied with the work and in general it meets their expectations. Only in one case loan officer was less satisfied, because opportunities to use her financial background in full scale were limited. However, after the last monitoring it was revealed that management broadened employee’s work scope and included additional financial responsibilities, thus satisfying the needs of loan officer. AMFA identified most and least favourite areas of loan officer’s work. Majority prefer to analyze information and dislike to make monitoring visits to houses. All necessary daily guidance was provided from the side of supervisors and in overall there was no dissatisfaction with working environment. Ladies didn’t face obstacles and negative situations with their clients, only one loan officer faced with aggressive client who refused to return the loan. The problem was resolved after intervention of supervisor. The loan officers also provided number of recommendations on enhancement of their work and conditions: a) increase of portfolio in order to provide loans to as much clients as possible as with limited money refuse rate is very high; b) improvement of office space; and c) provision with computers and access to mobile calls. These recommendations were later discussed with management to find opportunities for suggested improvements. All loan officers who were recruited in the framework of the project will continue their work in the institution after the project period. Only one contract might be temporary terminated due to lack of financial resources of MFI.

CONCLUSIONS AND RECOMMENDATIONS The project undertaken by AMFA in 2005-2006 provides a first comprehensive insight to gender situation in microfinance sector and equips all interested parties with essential information for incorporation of gender to their strategies. Analysis made and data obtained, enabled AMFA to increase: • level of institutional gender awareness • participation of women in micro-finance institutions as field staff • number of female clients After first gender assessment and discussions with management of organizations project participants expressed strong interest in increasing the focus on gender equity and enhancement organizational gender sensitivity. They committed themselves to incorporate gender policy, recruit female loan officers and train newly recruited and existing staff in gender awareness. Recruited personnel demonstrated high performance and proved capacity to answer requirements of the position and attract more female clients. HR staff is equipped with gender related information and list of skills necessary for recruitment of successful loan officers. This will ensure sustainability in gendering process of microfinance sector. Gender shall be continuously introduced and addressed in microfinance sector. To this end, Azerbaijan Micro-finance Association recommends the following:

Gender sensitive approach towards clients

1. Identify needs and constraints of male and female clients in accessing and using credit;

2. Analyze how finance products, and the way they are advertised and delivered, respond to what the customer expects;

3. Expand advertisement of services among women, preferably at the places where women tend to congregate (e.g. market, health clinics, beauty salons, schools etc.). This shall be a continuous process and MFIs shall assess how their services can be more gender sensitive;

4. Ensure that both men and women have equal opportunity to take decision-making positions in a group;

5. Institutionalize participatory feedback from clients in any planned microfinance activity;

6. Ensure that application forms and credit officers are sensitive to the needs related to the literacy level of male and female customers.

7. Provide opportunity to client to work with female credit officer, if preferred; 8. Collect data about clients and break it down by gender;

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Recommendations on gender sensitive approach towards staff and organizational structure

1. Ensure that gender equity is one of the core values of the organization and all employees cherish this value;

2. Set gender-sensitive objectives for the microfinance programme; 3. Increase gender awareness and offer gender training to employees, in

order to bridge the gap between gender and microfinance; 4. Entitle male and female staff to equal pay scale, travel allowance, training

opportunities, benefits and bonuses; 5. Apply equal recruitment policy in case of male and female staff; 6. Gradually increase number of female staff at the field level as well as at all

levels of management; 7. Undertake careful planning to prepare female staff to take up senior

leadership roles; 8. Every effort shall be made to increase the number of women serving as

short-term consultants or volunteer( as they may be qualified for some positions in future with growth of MFI);

9. If necessary to achieve the target to increasing female staff, invite applications only from female candidates;

10. Apply the same policy for annual leave and medical leave for both male and female staff. Female staff in addition shall be provided with maternity leave;

11. Dismiss staff, irrespective of sex, in accordance with the set service rules of the organization. If any male staff physically abuses a female staff and it is proved thereby, he shall be dismissed immediately from his job;

12. Provide opportunity to female staff, including field-level, to participate in training courses, seminars and workshops both at home and abroad;

13. Create opportunity and give priority to female staff for pick-up and drop by the office transport, especially for the field visits;

14. Establish networking and lobbying to ensure that gender issues are considered in financial policy;

15. Learn from best practices of other MFIs.

It is also advisable to increase women participation in the sector through employment of female credit officers, their training and carrying out information dissemination campaigns among potential female beneficiaries in the regions.

BIBLIOGRAPHY Gender Assessment for USAID/Caucasus/Azerbaijan/Asylum. United States Agency for International Development, Azerbaijan, January 2004

Gender Glossary. United Nations International Research and Training Institute for the Advancement of Women, INSTRAW, 2004

Innovating from Experience. Gender Initiatives in Microfinance. Ford Foundation, New York, January 2001

Microfinance Consensus Guidelines. CGAP/World Bank Group, Washington, September 2003

Promoting gender-sensitive entrepreneurship via microfinance institutions. Una Murray, FAO Gender and Population Division, April 2005

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ANNEX 1

Skills for Successful Loan Officers

In order to determine main qualifications required for and expected from credit officer, Project Coordinator conducted trips to regional offices of MFIs and met with both credit officers and clients. Supplementary information such as a) cultural and traditional peculiarities that create problems in communication between male credit officer and women clients; b) necessity in recruitment of women credit officers for increase of the number of women clients; and c) general attitude towards female credit officers were also obtained. As revealed, in big cities co-operation between male credit officers and female clients in most of the cases is not problematic. However, this problem exists in smaller cities where national traditions play an important role. While working with male credit officer, women clients feel themselves more comfortable in group than in individual lending method. Main obstacles appear when there is a need for male credit officer to conduct house visits and monitoring of female clients. There are also difficulties in communication when female clients own women specific businesses, e.g. beauty salons or sale of underwear. In this case both credit officers and clients encounter problems in discussion of business developments. Both interviewed credit officers and clients agreed on the following statements:

• It is difficult, but possible to find women in the region willing and capable to work as credit officer;

• Female credit officers are in general positively accepted by rural and urban population;

• Women credit officers could attract more female clients, so there is a necessity in their recruitment;

• It is much easier for female to make first contact with women and further monitor the process of business setting;

• Female employees have more responsible attitude towards the work than male and therefore have better risk and delinquency management;

• Male credit officers can’t pressure on female clients, who delay the repayments and female intervention is necessary in this cases;

• Due to cultural tradition men feel ashamed to have debt to women and therefore, in some cases female credit officers can influence male clients on timely repayments.

Differences in opinion appeared in the identification of required qualifications for credit officer. Currently employed credit officers and management staff focus more on professional characteristics, while clients prioritize personal

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qualifications. Summarizing all required/desirable qualifications and general norms the followings shall be considered, but not limited to, during recruitment of female loan officers. In a whole, these qualifications are also applicable to male credit officers. Personal characteristics

1. Ability to communicate 2. Ability to listen and observe 3. Psychological equilibrium 4. Positive attitude 5. Patience 6. Empathy 7. Transparency 8. Motivation 9. Ability to express strengths and exigency 10. Analytical ability 11. Ability to screen people and make right assessment of the situation 12. Ability to work individually and in a team 13. Fairness and reliability 14. Risk taking and decision making 15. Knowledge of local people psychology

Professional skills

1. General business knowledge 2. Local market development knowledge 3. Economic knowledge 4. Understanding legal and regulatory issues 5. Understanding competing financial services 6. Understanding financial statements and risk management 7. Ability to train and guide on business plan

Comment: Neither MFIs nor clients indicated computer literacy as necessary requirement, however this element shall be definitely considered. Additional factors

1. High education, preferably in agriculture or economy; 2. Sufficient life experience 3. Preferably originate from the same region 4. Accept work requirements beforehand, e.g. tight schedule, overtime work

if required, frequent field trips etc. 5. Possess driving license and driving skills.

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ANNEX 2

MFIs Co-operation Requirements in Gender Responsive Microfinance Project

(ADB/AMFA)

1. Commit to improve institution’s gender awareness and encourage

participation in lending and management roles;

2. Appoint a Focal Person to ensure timely support to the Consultant;

3. Actively participate in project activities including coordination meetings,

workshops and training sessions;

4. Provide background documents and information to Gender Consultant on

field operational guidelines, location of branch offices and contact information,

gender related MIS reports, statistics, policies or other internal documents;

5. Fill-out questionnaire designed to assess internal gender policy;

6. Facilitate trips of Gender Consultant to the field, i.e. organize meetings with

loan officers and clients and logistics support;

7. Provide information on resigned loan officers and facilitate the contact;

8. Consider and adopt gender strategy developed for MFIs on necessary

changes and additions to existing rules and procedures;

9. Based on the gender strategy developed by Consultant establish a gender

policy that creates equal opportunities for both clients and employees;

10. Commitment to hire women mobilizers (1-3, depending on internal

assessment) and after 6 months promote them to credit officers depending on

performance;

11. Ensure participation of Gender Consultant during the interviewing process;

12. Engage mobilizers as integral parts of organization’s operations and provide

them with all necessary logistical and administrative support;

13. Ensure participation of female mobilizers and HR staff at gender trainings;

14. Track and report requested data to assess the impact of mobilizers before,

during and after their employment under the project.

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ANNEX 3

Questionnaire

INSTITUTIONAL GENDER POLICY ASSESSMENT

Azerbaijan 2005 Please, note that your insightful answers are crucial to our effort in understanding the challenges of effectively addressing gender issues in microfinance. Please, provide as much detail as possible. We would appreciate if you could also provide us with any gender related documentation. Please, contact Ms.Maryam Haji-Ismayilova, Project Coordinator at [email protected] Thank you in advance for your effort.

Date:

Organization:

Address:

Fax:

Email:

Name and title of contact person:

Block 1. Institutional profile: Location of offices: Geographic Area of Operations: Current Number of Active Clients = Rural = % Urban = % Average Loan Size: Male = Average Loan Size: Female = Percentage of female borrowers = Block 2. Institutional policy and action

1. Does the organization have a clear policy, which includes a gender policy?

□ Yes □ No

If No, do you plan or consider to adopt one? □ Yes □ No

2. Does the gender policy include an activity plan with time frame (e.g. elements for monitoring and evaluation) and allocation of responsibilities?

□ Yes □ No

3. Are adequate financial resources allocated for the implementation of the gender policy?

□ Yes □ No

If Yes, who is responsible for its implementation?

4. Does the organization conduct its monitoring, evaluation and strategic planning in a gender sensitive manner?

□ Yes □ No 5. Has organization performed an assessment of gender programming or otherwise

documented the work implemented to promote gender equity within institution and the community in which the organization operate?

□ Yes □ No If yes, is it possible to have access to such analysis?

□ Yes □ No Block 3. Institutional structure

6. Does the organization experience the constraint in reaching potential female clients due to lack of female staff and female loan officers?

□ Yes □ No If yes, how does your organization manage this constraint?

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7. What is the number and percentage of female staff in the organization?

______ (number) % _______

8. What is the number and percentage of female management staff in the organization?

______ (number) % _______

9. Is staff with specific gender expertise and responsibilities located at key positions in the organization?

□ Yes □ No

10. What is the number and percentage of female loan officers in the organization?

______ (number) % _______

11. Is hiring of female loan officers staff promoted in the organization?

□ Yes □ No 12. What concrete steps has the organization taken to increase the number of female

staff, especially loan officers?

13. What steps has the organization taken to ensure promotion and career development of female loan officers?

14. What are the obstacles of finding, hiring and retaining female staff?

15. What are the advantages of having female loan officers?

16. What are disadvantages of having female loan officers?

17. Do men and women receive equal wages for equal work in the organization?

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□ Yes □ No 18. Is new staff selected on the basis of gender sensitivity and capacity to deal with

gender issues in very practical terms?

□ Yes □ No 19. Are gender issues discussed during performance appraisal interviews?

□ Yes □ No 20. Are job descriptions clearly defined (as far as gender is concerned)?

□ Yes □ No 21. Is there a gradual increase of gender expertise among all staff members, e.g. as a

result of training?

□ Yes □ No Block 4: Organizational Culture

22. Does gender fit into the image of the organization according to staff?

□ Yes □ No 23. Do women within the organization, and among beneficiaries, perceive the

organization to be woman friendly?

□ Yes □ No

24. Are there effective mechanisms for coordination, consultation and organizational gender learning between various parts of the organization, both horizontally and vertically?

□ Yes □ No

25. Are gender taken seriously and discussed openly by men and women?

□ Yes □ No

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Block 5: Markets and Clients

26. What is the objective of the organization for working with women clients?

27. How do you ensure that female clients learn about and have access to services provided by the organization?

28. Are the loan officers acceptable culturally, i.e. are female customers comfortable, and allowed to do business with male loan officers?

□ Yes □ No

29. Are women loan officers accepted by male customers?

□ Yes □ No

30. Are the data collected by your organization broken down by gender?

□ Yes □ No

Additional Comments

Please, provide any additional information or comments you feel pertinent to our understanding of the gender dimension of the organization’s operation.

Thank you

ANNEX 4

Monitoring Questionnaire

Supervisors 1. General satisfaction by the work of credit officer? Poor Average Very good 2. What is the number of clients served by new credit officer? ____ No 3. Do number of female clients increased with the recruitment of female credit officer? Yes No 4. If yes, please, provide increase via statistics. Number: past _______________ present _________________ Percentage: past _______________ present _________________ 5. Did credit officer increase professional knowledge from the time of recruitment? Yes No 6. What are the relations of newly recruited credit officer with other staff? Poor Average Very good 7. What is the attitude of clients towards new loan officer? Positive Negative 8. What is the attitude of male clients towards new female loan officer? Positive Negative 9. Were there any negative/complicated situations caused by credit officer? Yes No with defaulters 10. What shall be improved to make female credit officer more effective?

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Technical Assistance Consultant’s Report...This report covers Gender Responsive Microfinance...

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