Managing Growth in Microfinance Institutions: Lessons from the ACCION Experience

This article is available on pages 59-61 of this compilation document.

ACCION's most successful affiliates have three common characteristics:

• Appropriate usage of lending methods;
• Focusing on the development of strong financial institutions;
• Linking themselves to the commercial financial sector.

However they still require technical support in the areas of:

• Governance: if an institution wants to access financial markets, it must compete with other financial institutions. To do this, the institution must have the right private sector leaders on its Board;
• Financial Planning and Management: accessing financial markets while managing rapid growth requires major innovations in financial planning and management beyond that customarily employed in NGO microcredit programs;
• Human Resources Development: as ACCION's affiliates have grown in outreach (client numbers), they have also grown in staff size and organizational complexity. Maintaining a strong cadre requires creating clear career tracks and performance incentives.

ACCION has taken three initiatives to ensure that organizational development receives sufficient attention in its affiliates:

• Emphasizes the importance of regular staff training, both on-the-job and in dedicated time off-work;
• Helps its affiliates develop their own in-house training capacity, making sure that they all have human resource departments, and that these departments are upgraded as the institution grows;
• Convenes two-day management and communications workshops for its affiliates, which provides opportunities to discuss and resolve pressing human resources issues in the presence of senior human resource development advisors.