Dr Mathilde Maitrot GCRF PostDoctoral Researcher Global Development Institute Outline of todays presentation Determinist conceptualizations and their application to microfinance Mission Drift ID: 786800
Download The PPT/PDF document "Understanding social performance: a ‘p..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Understanding social performance: a ‘practice drift’ at the frontline of Microfinance Institutions in Bangladesh
Dr Mathilde Maitrot GCRF Post-Doctoral ResearcherGlobal Development Institute
Slide2Outline of today’s presentation
Determinist conceptualizations and their application to microfinance‘Mission Drift’ Methodology
The ‘Practice drift’
Human action and agency in microfinance practice
Conclusion
12th June 2017
5th European Research Conference on Microfinance
2
Slide3Determinism and Microfinance
Post 1990s: New Development Management Result-oriented management systems: Impact in questionMixed-results (Banerjee et al. 2015, Duvendack
et al. 2011; Maitrot and Niño-
Zarazúa
2015, Roodman 2011, Stewart et al. 2012)Questions raised remain unanswered (Hermes and Lensink 2007, Mersland and
Strøm 2010; Roy 2010)
12th June 2017
5th European Research Conference on Microfinance
3
Slide4Looking for explanations
Products? Environment? Clients?
...and institutions put under the microscope.
12th June 2017
5th European Research Conference on Microfinance
4
Slide5‘Mission drift’
Intentional top-down change in the social mission and institutional practicesTo solve a perceived trade-off between the pursuit of the social and the financial mission
Enhanced by dynamics of commercialisation
Cross
-subsidisation of clients MFIs move away from poorer clients in favour of less risky clients and larger loans to better off households (Copestake 2007; Mersland and Strøm
2010).
12th June 2017
5th European Research Conference on Microfinance
5
Slide6Methodology
Bangladesh Mixed-methodsVillage ethnography + Rapid Livelihoods Survey (490 HH)2 institutional ethnographies + Questionnaires to credit officersCase study of one MFI: ASA
12th June 2017
5th European Research Conference on Microfinance
6
Slide7‘Practice Drift’
It is at the margins that the trade-offs between the social and the financial mission are brokered.Without altering claims about the mission of microfinance, practices in the field can shift in a way that contradicts its social mission.
Emphasises set
of informal practices through which MFI field staff achieve financial targets
._drift in behaviour and attitudes
_opportunistic targeting and retaining of poor and vulnerable households. S
tructures and management systems can create the conditions for practices to
drift
and social performance
to suffer
12th June 2017
5th European Research Conference on Microfinance
7
Slide812th June 2017
5th European Research Conference on Microfinance 8
NGOs pursue financial autonomy (Fernando
2006) in an attempt to maintain a degree of autonomy from donor agencies
and political patronage (Lewis 2017). Development as mobilisation to development as service delivery (Rutherford 1995: 70)
ASA: The world’s leading MFI by MIX report in 2005, as the world’s best MFI by Forbes in 2007
A ‘vision unmatched in its clarity and relentlessness’ (
Morduch
in Rutherford 2009 ix)
Microfinance in Bangladesh
Slide9ASA’s strategy for success
Standardised and low-cost human resources policies. Donor-free in 2011Disbursed
US$2.68 billion to 7.4 million clients (
ASA,
2016). Efficient monitoring system detecting fraud and default within 1/15 days. Branches are financially self-sufficient profit centres that assume HR and admin costsSanctions and penalty systems safeguard ASA’s financial performance
12th June 2017
5th European Research Conference on Microfinance
9
Slide10‘DM visit
branches to “motivate” us and write a review which depends on our profit. In 2008, the sir gave a good review but in 2009 and 2010 the profit was less and sir sent a circular to motivate us to improve ourselves, but this year it is better’.
Interview
, ASA regional manager, Tangail District, April 2011
.‘If the speed at which we can disburse loans is fast then we can make profits, but if it’s slow then losses are faced. Initially our total loan amount outstanding was low but now it’s about BDT1.5 crore.
[approximately US$210,000]
Interview, ASA branch manager, Tangail District, April 2011
12th June 2017
5th European Research Conference on Microfinance
10
Slide11Everyday ruling relations at the branches
Live at the branchesFollowing rules and regulations from the Manual Meet everyday individual financial targets: strict no repayment delay policyPersonal performance for meritocratic promotion
Spending time with clients, explaining the purpose and implications of loans is not incentivised within the institution.
12th June 2017
5th European Research Conference on Microfinance
11
Slide12The Practice drift in practice
Tactics:Lowering standards for selection and follow-up of clients.
Micro-collaterals for the poor (based on credit officers’ informal judgement).
Forceful top-up, hard-selling of loans, asset confiscation through
‘abusive’, ‘threatening’ and ‘publically humiliating’ tactics.Savings withdrawal.Repayment is central to their relationship ‘taka dai
khali, taka nei
… ar kicchu
nai
’.
12th June 2017
5th European Research Conference on Microfinance
12
Slide13‘Banks
[MFIs] give money to everyone, they don’t worry about helping anymore; they only care about interest and repayments … People misuse the money now and the officers do not check on them like they used to. The relationship was better then. … They only talk about money and instalments, before they were very light hearted. They would advise us about our mistakes but now it’s nothing like this.’
Interview
,
Parveen, former microfinance client, Tangail District, February 2011.12th June 2017
5th European Research Conference on Microfinance
13
Slide14Conclusion
Findings challenge deterministic frameworks for understanding policies and interventions. Analysis points to the significance of human actions (everyday brokering activities)
for
performance
. No incentives or mechanisms within ASA for field officers to measure, report or represent the interest of clients. Daily client recruitment, top-up loans, follow-up procedures and repayment collection practices tacitly drift at the field level.
12th June 2017
5th European Research Conference on Microfinance
14
Slide15Thank you for your attention!
12th June 20175th European Research Conference on Microfinance
15