A Fresh Approach in Human Capacity Development - The Establishment of a Certification System for Microfinance Managers in Indonesia

This paper presents a new approach in the area of capacity building, namely the introduction of a certification scheme (CERTIF). It describes the capacity building system developed for the microfinance industry in Indonesia. The paper provides the answers to the following:

• How to create a certification system?
• Why to create a certification system?

The report further describes the features of the system:

• The system has its focus on skills and competencies needed by microfinance managers to efficiently and profitably run their respective institutions;
• The system is centered on a certification institute, the CERTIF Institute, which is in charge of:
  • Developing skills and competency catalogues;
  • Setting standards for training materials and delivery;
  • Carrying out examinations to assess the capacity of microfinance managers.
• Training development is based on market demand;
• Training programs are carried out by the training providers competing in the free market.

Some of the lessons learned and main recommendations are as under:

• Embed capacity building into a broader sector development strategy;
• Provide enough time for conceptual discussions;
• Leave opportunities open;
• Ensure independence of the system;
• Provide enough resources for institutional development;
• Do not neglect institutionalization for operational tasks;
• Use 'smart" subsidies.

Finally the paper concludes with the three main favorable conditions identified for the CERTIF are:

• A conducive political environment;
• A developed (and segmented) microfinance market;
• An established training provider market.