Microfinance serves as a beacon of financial hope for individuals and small businesses in developing regions. It serves as a means of economic empowerment, offering loans, savings, insurance, and other financial services to people who are traditionally underserved by conventional banks. With access to microloans, small entrepreneurs can start or expand their businesses, leading to job creation and income generation.
Our client is a foundation that has been providing micro-finance for almost half a century. It has worked towards elevating lives through a comprehensive best-practice approach in community development.
To operationalize the company’s desire to grow the organisation and its services. To do so, it first needed to implement better systems and processes for their people. As such, the Client asked Renoir to conduct an analysis looking into the main operational drivers supporting both micro finance and project management.
The Analysis performed included the following:
For Micro Finance:
- Insufficient planning and control of Prospects
- Limited time was spent developing ‘new sales’ and planning was informal
- Low compliance to policies and processes with limited, active supervision
- Branches were managed by individual’s styles rather than in a standard way
- Lack of systematic supervisory/management controls
- Data inconsistencies and delays prevented timely consolidation and impeded performance reviews
For Project Management:
- Despite being a “project management” organisation, there was little evidence of a robust project management approach
- Detailed planning and scoping of initiatives were lacking
- Systems to roll down activities into operational KPIs, with controls in execution and follow-up, were not in place
- Lessons learned were not captured to contribute to a knowledge management culture
Project Governance was established with two Management Action Teams, a Micro Finance team and a Project Management team. A weekly Steering Committee, comprised of the CEO, COO, and members of Board of Trustees, reviewed and evaluated key activities, ensuring that the Project remained on course and on time.
The Project began with Renoir’s Focus Process™, looking into processes and the as-is Management Control System (MCS), with studies and workshops during this opportunity identification stage. This ensured maximum impact, ownership, and prepares the organization for strong post Project sustainability.
“ I was very impressed with the development of the Project and feel the sense of ownership and commitment of the task force, Management Actions Teams and the other team members who are involved. The team’s achievement so far is remarkable.”
Firstly, the Micro Finance team focused on reducing processing time, expanding outreach whilst growing satisfaction levels and controlling risk, through reliable reporting and a short interval control monitoring system.
- Designing short interval control mechanisms and a joint fieldwork structure to ensure that performance is regularly reviewed, variances addressed, and behaviour positively changed.
- Implementing Sales planning, prospect and pipeline management processes to ensure that potential clients are effectively targeted.
- Improving loan processing to shorten the processing days while maintaining the visibility of potential risk.
- Develop a training program for sales representatives and Branch Managers to support installed management systems and to improve their capabilities and effectiveness.
- Re-clustering the meeting venues to reduce the travelling time of the trust staff.
- Improving the KPIs and incentive program to ensure that only performing sales representatives are rewarded.
- Install area and branch level scorecards to increase operational visibility and improve targeted performance.
- Design audits for installed systems to ensure behavioural change and sustainability.
Secondly, the main objective for the Project Management team was to standardise project management processes and systems and to create a project management framework to serve as a model for other units. The team identified areas of improvement that yielded clearly defined criteria and resources planning, a communication plan to increase partnership, and optimize budget utilization. Activities included:
- Identified and defined the Milestones that would trigger a ‘Go’ or a ‘No Go’, as the guide in ensuring effective execution of a project.
- Defined cascading KPIs for clear accountabilities and measurable results.
- Installed project officer to focus on communication, and leverage participation from partners in project.
- Installed a capacity planning tool to ensure that resources were well prepared for project execution and success.
- Developed a forecasting and budgeting tool to improve target setting.
- A project planner and tracker were installed, together with a weekly monitoring schedule to ensure that projects and activities were on schedule and met quality controls.
- Installed a Meeting Effectiveness Tool and Action Logs that records and tracks agreed actions.
- Improved Daily and Weekly progress reports for site monitoring and materials inventory to track progress and quickly address issues.
The change in processes and systems yielded the following:
While sales trended upward with more than 50% improvement in loan value, the new daily/weekly short interval control review schedule resulted in a 32% reduction of the Portfolio At Risk.
Project Management developed a standard project framework for SRP and other programs. Partner involvement through a new project officer component & communication plan, new process with defined gate control, and better resources planning, helped reduce project lead time by 48%.
The comprehensive overhaul of our client’s microfinance and project management processes has yielded remarkable results. Improvements in operational systems and procedures have led to significant increases in loans released and substantial reductions in processing time. With more partners entering the program and project lead times halved, the foundation is now poised for sustainable growth and expanded outreach.
Crucially, the implementation of behavioural audit mechanisms served as a fundamental driver of cultural change, significantly contributing to the positive outcomes observed. These audits included continuous learning, guiding and coaching. They resulted in a proactive and positive attitude among frontline staff and managers, laying a solid foundation for organizational growth. This cultural shift, coupled with the sustainability of newly implemented processes and systems, has enabled enhanced performance and a culture of continuous improvement.