Creative And Innovative HR Practices By The Microfinance Entrepreneurs

Mamta Kumar, Assistant Professor; Saumya Singh, Associate Professor

Mamta Kumar, Assistant Professor Goel Institute of Technology and Management, Lucknow
Saumya Singh, Associate Professor Department of Management Studies, Indian School of Mines, Dhanbad

Keywords: HR Practices, Innovation, Entrepreneurship, Microfinance

Abstract

Microfinance institutions (MFI) are making their presence, strongly felt in providing financial assistance to
the poor. Similar to the organizational structure in any financial institution, microfinance institutions also
have a set of employees at different levels such as managers, agents and clients, which in this case are poor
people who need loan and support. Therefore, it is important that the standard practices followed in
established institutions are followed in MFIs. In this research, we study the existing HR practices in MFIs
and suggest the innovative and better model that can improve the functioning of MFIs. A semi-structured
questionnaire, concerning the current and expected ideal HR practices is used to collect responses over a
period of time from 190 participants, including 30 HR managers, 60 employees and 100 clients of different
MFIs in Uttar Pradesh and Bihar. The responses were used to study the practices followed by the MFIs
regarding recruitment, training, motivation, employee attrition were studied. The analysis showed that
human resource practices need to inculcate value chain support, innovative training and education for
clients and employees, and tracking poverty exodus by means of poverty index. We also make some
recommendations about the human resource management practices for both employees, managers and
clients that can contribute towards establishing successful micro enterprises, thereby improving the
functioning of MFIs and helping its clients.