A career in microfinance can leave you both well-off and satisfied, says V. Kumara Swamy
Did you always want to work for the social sector but were apprehensive that you wouldn't be able to make a living out of it? Well, then try a career in microfinance. And if you are looking for inspiration, don't look too faróNobel Laureate Muhammad Yunus of Bangladesh and Vikram Akula of SKS India, one of the largest microfinance institutions (MFIs) in the country, are just two of the many who are making a difference to millions of lives.
As opposed to the traditional financial sector, microfinance provides micro-loans (Rs 500 to Rs 50,000) to the poor to start their own enterprises. These can range from broom making to vegetable vending. A microfinance professional is involved in various stages ó from providing a blueprint to setting benchmarks for the repayment of loans. For example, a field officer of an MFI is put in charge of a group of women in a village that specialises in say, zari work, but is in need of finance. First, the women undergo training and are then asked to submit a plan. The officer then helps the women to obtain the loan and then monitors their progress.
There are three ways in which one can contribute to this sector. First, one can opt for a career in MFIs like SKS Microfinance and Kathiresan Abhirami Saratha (KAS), which operate in many parts of India or at a regional MFI like Village Welfare Society (VWS) in Calcutta. Secondly, one can choose to work for the microfinance division of a bank. Thirdly, he or she can work as a consultant to banks and microfinance institutions.
The ultimate dream of most dedicated professionals in the field is to open an MFI of their own. Most prefer opening trusts and start by financing the needs of small groups and individuals. Once a trust is confident of reaching out to more people, it can approach a bank and graduate into an MFI.
Fresh graduates with a social science background can work as field officers at MFIs, while fresh MBAs can find jobs at the middle management level as branch or regional managers. "What drives development workers is the meaningfulness of the work we do," says Akula, founder and CEO of SKS India. Time magazine named Akula as one of "the people who shape our world". India has 400 million poor families, whose total finance need is Rs 360,000 crore, of which only Rs 20,000 crore is being met by the MFIs in the country.
"On the one hand, we have urban youngsters who are socially conscious, wanting to contribute to society at large and on the other, youngsters in small towns want to make a difference to peoples' lives while earning a decent living," says Nachiket Mor, deputy managing director, ICICI Bank.
"After insurance, microfinance is the most exciting field for youngsters in the financial sector," says Kuldip Maity, who heads the microfinance division of VWS, Calcutta.
According to Maity, an MBA fresher can earn anywhere between Rs 15,000 and Rs 20,000 a month. And people with a few years of experience in MFIs are even snapped up by the microfinance divisions of banks for six figure salaries. Typically, professionals are given targets and they are rewarded according to their performance.
It's a sunrise industry, situated probably at the same point as the software industry was about 15 years back, says Rahul Nainwal, head of www.microfinancejobs.com, a jobs portal for the microfinance sector.
Microfinance is very much a commercial operation. "One of the challenges is to bring down the delivery cost which needs a lot of technology," says Alok Prasad, business manager of Citibank's microfinance group in India. "The motivating factors for students are an entry to formal financial institutions and exposure to national and international organisations," says Daksha Niranjan Shah, head, credit programme, Friends of Women's World Banking, Ahmedabad. Institutes like the IRMA, the XIMB, the Delhi School of Social Work and the Enterprise Development Institute, Ahmedabad, offer rural management and microfinance courses. "More and more microfinance companies are approaching our students," says Saveeta Mohanty, placement coordinator, XIMB.
"Youngsters in this field should have a financial understanding, analytical abilities to assess the forthcoming nature of investment, the health of the economy, a strong social bias and affinity for the disadvantaged sections of the community," says Manoj Mishra, programme director at the Enterprise Development Institute. A two-year course at a premier institute like the IRMA costs around Rs 2,50,000.
Even the United Nations offers a free online microfinance distance learning course through its United Nations Capital Development Fund. Says Suchitra Chatterjee, who works as a risk manager with VWS, "I am aware I am working in a socially conscious sector but I am assured about my future," she says.
So take the plunge. Not many jobs give you a chance to change people's lives.