The Pow­er of Micro­fi­nance: Catalysing Eco­nom­ic Growth with a 57% Jump in Loan Value

THE CHALLENGE

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.

ANALYSIS

The Analy­sis per­formed includ­ed the following:

For Micro Finance:

1. Insuf­fi­cient plan­ning and con­trol of Prospects
2. Lim­it­ed time was spent devel­op­ing ‘new sales’ and plan­ning was informal
3. Low com­pli­ance to poli­cies and process­es with lim­it­ed, active supervision
4. Branch­es were man­aged by individual’s styles rather than in a stan­dard way
5. Lack of sys­tem­at­ic supervisory/management controls
6. Data incon­sis­ten­cies and delays pre­vent­ed time­ly con­sol­i­da­tion and imped­ed per­for­mance reviews

For Project Management:

1. Despite being a “project man­age­ment” organ­i­sa­tion, there was lit­tle evi­dence of a robust project man­age­ment approach
2. Detailed plan­ning and scop­ing of ini­tia­tives were lacking
3. Sys­tems to roll down activ­i­ties into oper­a­tional KPIs, with con­trols in exe­cu­tion and follow-up, were not in place
4. Lessons learned were not cap­tured to con­tribute to a knowl­edge man­age­ment culture

PROJECT APPROACH

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.”

COO

IMPLEMENTATION

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.

Actions includ­ed:

1. Design­ing short inter­val con­trol mech­a­nisms and a joint field­work struc­ture to ensure that per­for­mance is reg­u­lar­ly reviewed, vari­ances addressed, and behav­iour pos­i­tive­ly changed.
2. Imple­ment­ing Sales plan­ning, prospect and pipeline man­age­ment process­es to ensure that poten­tial clients are effec­tive­ly targeted.
3. Improv­ing loan pro­cess­ing to short­en the pro­cess­ing days while main­tain­ing the vis­i­bil­i­ty of poten­tial risk.
4. Devel­op a train­ing pro­gram for sales rep­re­sen­ta­tives and Branch Man­agers to sup­port installed man­age­ment sys­tems and to improve their capa­bil­i­ties and effectiveness.
5. Re-clustering the meet­ing venues to reduce the trav­el­ling time of the trust staff.
6. Improv­ing the KPIs and incen­tive pro­gram to ensure that only per­form­ing sales rep­re­sen­ta­tives are rewarded.
7. Install area and branch lev­el score­cards to increase oper­a­tional vis­i­bil­i­ty and improve tar­get­ed performance.
8. 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:

1. Iden­ti­fied and defined the Mile­stones that would trig­ger a ‘Go’ or a ‘No Go’, as the guide in ensur­ing effec­tive exe­cu­tion of a project.
2. Defined cas­cad­ing KPIs for clear account­abil­i­ties and mea­sur­able results.
3. Installed project offi­cer to focus on com­mu­ni­ca­tion, and lever­age par­tic­i­pa­tion from part­ners in project.
4. Installed a capac­i­ty plan­ning tool to ensure that resources were well pre­pared for project exe­cu­tion and success.
5. Devel­oped a fore­cast­ing and bud­get­ing tool to improve tar­get setting.
6. 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.
7. Installed a Meet­ing Effec­tive­ness Tool and Action Logs that records and tracks agreed actions.
8. Improved Dai­ly and Week­ly progress reports for site mon­i­tor­ing and mate­ri­als inven­to­ry to track progress and quick­ly address issues.

KEY RESULTS

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%.