News & Insights

One Way our Partners are Redefining “Productivity”

by Lara Diaconu, vice president, Health Services Fund, Global Partnerships

A couple weeks ago I moderated a panel on sustainable health services models at the 6th Village Banking Forum held this year in Guayaquil, Ecuador. Two of our partners, Pro Mujer in Nicaragua and ESPOIR, presented what they had learned about what it takes to implement high performing health services programs via the village bank platform. While much was shared, one main takeaway I had was the importance of investing in staff capacity, particularly investing in those on the “frontline” of integrated service delivery with clients.

One striking example was made by Gloria Ruiz, general manager of Pro Mujer in Nicaragua. She shared how one day of every week is spent training their credit officers – on health topics, on sales techniques, on participatory education techniques, on human development and financial education - skills, values, and knowledge that credit officers need to be able to stimulate conversations among clients, transmit key information about how to prevent and manage prevalent health conditions, and promote health services and behavior changes that can improve lives.

Investing in staff capacity may sound like a no-brainer. However, dedicating one day a week to staff development is a strategic (and costly) decision but one they believe is worth it to better serve their clients. Quick calculations indicate that the economic tradeoff for investing in building staff capacity results in a loss of thousands of dollars in potential income for the institution. This means an increase in costs per client which decreases productivity and efficiency, standard measures used to assess microfinance institutions.

That is to say that “productivity” of credit officers is generally interpreted to be a key indicator of institutional strength, as the more clients each credit officer can manage, the lower the costs per client to deliver a loan, and therefore, potentially the more profitable the institution. Lower costs per client is also key for those institutions with a mission to serve lower income segments, as it renders it more economically feasible to deliver lower average loan sizes. These key operational indicators signal to both senior management and the microfinance industry how streamlined an institution’s processes are, and how competitively they can price their financial services in the market. To all of this, Gloria simply stated, “We have redefined productivity.” In this instance, productivity is defined by strengthening their staff capacity to provide the essential knowledge, information and services to meet the needs of their clients effectively even if it means less income for the institution.

Pro Mujer’s approach enables them to deliver quality education and services that improve the health opportunities for women micro-entrepreneurs in Nicaragua. It’s a bold, strategic decision but it is very much aligned with their commitment to do what it takes to be more than just a financial services provider.

Blog Tags: community banking   Ecuador   Espoir   financial inclusion   Latin America   microfinance   Pro Mujer   VI Foro Latinoamericano de Banca Comunal   village bank   

Global Partnerships' Lara Diaconu sits in between two of our partners--Espoir and Pro Mujer in Nicaragua.
Lara Diaconu (center) moderates a panel on sustainable health service models featuring two of our partners, Espoir (represented by Executive Director Francisco Moreno on the left) and Pro Mujer in Nicaragua (represented by General Manager Gloria Ruiz on the right). Photo © Global Partnerships 2013.

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