Thursday 18 July 2013

What is operations management on an MBA?

What is operations management on an MBA?

Professor Miguel Angel Heras of ESADE Business School has explained to TOPMBA.comwhat an MBA specialization in Operations Management entails...

  • Global 200 Ratings by Specialization - Operations Management 

The term Operations is generally used as an umbrella term to refer to the corporate area responsible for actually producing goods and services.
This includes all the activities required to create and deliver a product or service, from selecting suppliers and/or raw materials to supply chain management and distribution.
The organization of these different activities within the company implies a vision of the business as different processes. Of all the corporate divisions, operations tends to require the greatest number of employees and assets.
Generally in charge of product and service quality, operations is also the key basis on which the company’s long-term performance rests.
For this reason, operations is increasingly seen as a source of competitive advantage because correctly managing this area is fundamental to ensuring the company’s carefully crafted strategy becomes reality; without operations, corporate strategy would run the risk of remaining a merely theoretical exercise.
  • Learn more about MBA specializations >

Operations management

Operations management is the corporate area in charge of designing, managing and tracking different processes.
These processes are made up of interrelated, sequential activities through which the components and actors required (raw materials, labor, capital, information, the client, and such) are transformed into products.
The key is the value added through the process as perceived by the customer, i.e. the end product has a greater value than the elements pre-process.
These products are the goods and services people buy and use every day, from skis to washing machines, and medical assistance to tourism services. To create the vast array of end products the processes involved are extremely varied.
For example, in a factory setting these may include assembly, control and packing, where in the airline business they are more likely to be passenger check-in, flying the passengers from A to B and getting their bags back to them. In consultancy processes, the end products will be gathering data, drafting proposals and project implementation.
Beyond this, the pressure is on operations management to make improvements in sustainability, not least in environmental areas.
Operations departments are expected to incorporate eco-efficiency and eco-effectiveness principles into their processes. Further innovation is the key to competitive advantage, reduced costs and technological development, vital for the long term sustainability of the firm.
  • Learn more about innovation: can entrepreneurship and innovation be taught? >

How is Operations Management taught at MBA level?

At ESADE, the department of operations management and innovation applies a global focus to operations. Its aim is to stay a step ahead of companies’ current needs, giving MBA students the knowledge, skills and perspectives they need to create value for their firms in the future.
The study of performance measurement systems and business process models is at the core of the knowledge students gain.
ESADE treats operations not solely as an academic discipline, serving to optimize process implementation, but also fundamental support for company management to turn corporate strategy into reality.
This is achieved by implementing a process-based focus and applying measurement systems across all areas that form the basis for the subsequent use of Lean OperationsSix Sigma and Lean Six Sigma.
These techniques deliver enhanced flexibility, service levels and quality whilst lowering costs and reducing the variability of process outputs.
Other key areas addressed in MBA core courses and electives include: Supply Chain Management, Service Operations, Innovation and Environmental issues.
Supply Chain Management analyzes corporate purchasing, production and distribution processes. It has been recognized as a core competency for most firms today. The objective of Supply Chain Management is to systematically and strategically manage the flow of information and material among the various operations which make up the different strands or ‘chains’ of a supply network.
Service Operations studies the best Operations practices in different service industries and includes the modern concept of ‘servitization’ which represents the introduction of service components in manufacturing processes.
Innovation is explored from a perspective of creative thinking, breaking away from existing paradigms and design, and giving value to new processes, products and services.
Lastly, the focus on the Environment examines the strategic adaptation of operations to meet new environmental demands and requirements.
Professor Miguel Angel Heras is director of ESADE’s department of operations management and innovation.

Latest update of TANCET 2013


TANCET 2013 Exam for MBA , MCA , ME / M Tech examination held on April 6th , April 7th 2013, TANCET 2013 Exam Is for the Admissions into PG Degree in Anna University and its Affiliated Colleges for the academic year 2013 – 2013  
Tamilnadu Common Entrance Test 2013 (TANCET 2013) Conducted By Anna University, Chennai For Every Academic Year ( TANCET 2013 ) For Admission For PG Courses Offered At Anna Univ. And Affiliated Colleges, Tancet 2013 Exam Play An important Role

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Anna Univ MBA TANCET result 2013 , Anna University ME TANCET results 2013, TANCET MCA results 2013 , Results For ME/MTECH/MCA/MBA In TANCET 2013 Will Be Published In annauniv.edu ( Official TANCET 2013 Website ) , Once The Results For TANCET 2013 Has Been Announced Rejinpaul.com Will Publish  The Link For TANCET 2013 Result 2013 

TANCET 2013 Entrance Exam Results 2013 For Students Who written their exams in April 2013 Will Probably get Their TANCET 2013 result Within a Week , Students Are Eagerly Waiting For TANCET Results 2013 For ME MBA MCA MTECH, We Receive Request Like " When WIll The TANCET 2013 results Will Be Announced From Students In Daily Basis " TANCET 2013 Exam result Will Be Published here As soon as TANCET Result 2013 Has Been Announced

TANCET results For ME MBA MCA Is Expected To Announce Before Third Week Of May 2013 , If In Case TANCET 2013 Results Delayed Then results For TANCET 2013 Will Be Announced Before the end Of May Month 2013

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Wednesday 17 July 2013

LATENT IMPORTANCE OF EMPLOYER BRANDING IN HRM

by 

Shivang Ganatra, 
IIM Ranchi

Jerry: “I aspire to get placed at XYZ Company. I would do anything to be there!”
Tom: “Why? What is so special about XYZ?”
Jerry: “Don’t you know? They have a wonderful workplace ambience. You can choose your cabin. Have fun in your work area. There are sofas to sit even in the smallest of cabins and you can sleep whenever you want to. You have just 5 working days in a week. They provide you commutation facilities and food. If you don’t feel like working you can do your own work in the office as well for some time. They have awesome pay structure and most importantly you get to flaunt that you are working with ‘XYZ’!!”
So has someone finally managed to trap Jerry into something that seems to be too good to be true? Is Jerry going to have a ‘gala’ time at XYZ eating cheese throughout the day? Well that is what seems to be the case right now. However everyone knows that no company will hire someone just to provide him/her with all the luxuries of life without getting the work done from them.
So why all this excitement among job-seekers to get the opportunity to work for a few selected organisations? The answer is – EMPLOYER BRANDING.
image:freedigitalphotos.net
I am sure there would be many other companies which would be providing at least some of the aforesaid facilities. But the question here is how many of those companies can we name when asked out of the blue. Here comes the role of Employer Branding.
WHAT IS EMPLOYER BRANDING?
Employer Branding is the approach adopted by organisations to let the public in general and prospective employees in particular know about the culture and practices followed in the organisation. It is the sum total of all the efforts that an organisation makes to develop its image as seen through the eyes of its associates and potential hires.
Employer Branding in its holistic approach involves managing both the internal as well as the external stakeholders. The internal stakeholders would essentially be the current employees and the external stakeholders would majorly include the potential employees of the organisation.
SCOPE OF EMPLOYER BRANDING
There are various ways in which an organisation can brand itself. Many of the times organisations do resort to a few of these unknowingly as well. This is because almost all the activities that an organisation carries out has an impact on the perceptions people have about it.
However for a conscious employer who wishes to ‘brand’ itself in its desired way, following are the avenues to do so.
Recruitment: Employer’s can brand very effectively during the recruitment process. This is mainly because this is one time when an organisation reaches out to a large pool of prospective employees. The company can brand by giving out apt recruitment advertisements and adopting recruitment practices that it may feel brands itself in the best possible way.
An employer may show youth playing in the cafeteria in its recruitment advertisement if it wants to promote ‘fun @ work’ culture.
Selection: Even while selecting employees, subtle hints about the work culture and the processes in an organisation can be let out. When any person comes to an organisation to give an interview, he consciously or unconsciously forms an image about the company. Care should be taken that any potential employee is treated courteously by all the touch-points in the organisation. This is all the more important because perceptions and opinions are formed by these very small experiences that candidates have with the organisation.
It is also a good idea to courteously call and keep in loop even those candidates who do not get selected for any job role in the organisation. There have been instances when candidates have been impressed by the treatment given to them and they speak highly of an organisation even though they were not selected.
Training & Development: The scope of branding during training and development is majorly internal to the organisation. The current employees have a certain level of expectations from their employer. When proper training and development opportunities are provided to them, they think highly of the organisation. This results in a satisfied employee base which eventually spreads around the good word about their organisation.
Compensation & Benefits: Though this component seems to be a narrow one in the scope of branding, it is a very effective one. Most of the aspirers rate their overall compensation as one of the most important parameter in selecting an organisation. Few companies have been branded as very good paymasters as they have persistently worked towards developing such image.
A few innovations in the compensation structure can also help an organisation in building a unique brand for itself. Infosys was the first company in India to introduce ESOPs in the pay structure of its employees. It is till today remembered and revered for this initiative.
Performance Management: This is an aspect which is gaining prominence in branding as the new generation of employees are all the more concerned about enhancing their performance. Many high-achievers prefer an organisation where performance is valued over the organisations where it is given relatively less importance. The trick here is to establish and develop systems which are transparent and which encourage the overall improvement in the performance of an employee.
Work Culture: A very highly rated parameter in the candidates’ preference criteria for an organisation. This has to be developed over time. Some companies have earned a name for themselves with the highly unique and effective work culture that they have developed over a period of time. This again leads to highly satisfied employees who spread the positivity and vibrancy of the culture to other people.


INTERNSHIPS:
A novel idea to create a positive image in the minds of the prospective employees is to communicate your brand values to them during internships. Internships are opportunities not only for the employees but also for the organisations to portray a good image about the company. These days, employees/ students coming for internships are highly networked. This can be used as a platform to promote your organisation as ‘the place to be’. Any experience, good or bad, will have far reaching effects in the job market.
BRIDGING THE GAP:
HR Branding is not all about letting the external parties know about the organisation. It also includes selling your organisation to the current employees of the company. When employees enter your organisation, they would have certain expectations in their minds about the environment, culture, processes and people at the workplace. If these expectations are not handled properly, resentment may arise among the employees.
What we talked about in the initial part of the article was essentially about creating the right expectation set among the potential employees. What we are looking at right now is to handle the expectation set among the current employees. Firstly their expectations have to be figured out and it should be checked whether some general expectations of the employees can be met with. If the expectations are not possible to be fulfilled by the organisation, proper shaping of their needs and expectations should be carried out by the management.
Training and development initiatives and OD activities can help in bringing about change in people’s mindsets.

A study conducted by The Economic Times and ‘www.greatplacetowork.in’ lists out the following companies as the top 10 India’s Best Companies to Work for 2012:
  1. Google India
  2. Intel Technology
  3. NTPC
  4. MakeMyTrip
  5. Forbes Marshall
  6. American Express
  7. Mariott Hotels
  8. Intuit Technology
  9. Qualcomm India
  10. NIIT

In each of the above mentioned companies you will find something unique which promotes the organisation. These companies have mastered the art of staying on top of the minds of the prospective employees by adopting the right practices.
Employer branding activities may seem too expensive and irrelevant at times. But they have a very long term effect on how the organisation is perceived as a whole in the society. It aids in generating the goodwill and recognition in the job market and helps in acquiring and retaining the right kind of talent in the company.
The article has been authored by Shivang Ganatra, IIM Ranchi

SAFETY OF WOMEN EMPLOYEES - A BIG QUESTION MARK

by 
Payal Anand,
IIM Indore

According to a survey done by ASSOCHAM, working women are not comfortable & want to get back home after sunset as they have fear of some catastrophe to happen. The survey reports that the efficiency of women employees has been fallen by 40 percent due to the fear factor. The Delhi-NCR region has approximately 2500 IT and BPO companies which employ lakhs of women.
It’s not just about the impact of a barbarous rape on the female employees but the question arises on their safety in and outside the organization. Who should be answerable to these incidents and specially in the country where female employees are almost equally contributing to the economy as their male counterparts.

Image Courtesy: freedigitalphotos.net

Infact, the scenario is getting worse day by day where cases of sexual harassment are increasing in numbers. These cases come from within the organization where females are getting misbehaved, exploited, harassed or used for official or unofficial purposes. Not even in corporate, such cases are also emerging in premier educational institutes of the country. A recent case has been found in the country’s one of the renowned management institute where a female faculty has raised sexual harassment blame on her colleague faculty and the issue is becoming one of the hot topics among students and others faculty members. The male faculty is working in the institute for more than 4 years, is one of the popular and respected professors among the students. Though a gender sensitivity team has been established on urgent basis by the institute management still its awful to have these incidents in educational institutes.

In the words of MacKannon,” Sexual harassment may contribute to an undetermined extent to many aspects of women emplyoement experience,including absenteeism,turnover,productivity rates and work motivation,job dissatisfaction and unemployement”. While our society often provides us the proofs of unequal power relationships but they tend to appear the most in the workplace, where hierarchies are common. In the current scenario,women are participating in the workplaces at the fastest pace. Though,both women and men may experience sexual harassment in employment, but women tend to be more vulnerable to harassment by men, because relative to men, more women hold lower-paying, lower-authority and lower-status jobs. However, there are over 20 constitutional provisions laid down for sexual harassment, 70 per cent of women are not aware of them even in the Capital City Delhi, according to a survey brought out by the ASSOCHAM Women Development Foundation.The women safety in organization should be taken seriously and some guidelines should be made which is ought to be standardized by each and every organization. Atleast this step could help in uplifting the morale of women employees and can build their image infront of other employess in the organisation.

However,the barbarous rape and subsequent death of a 23-year-old girl in Delhi, last year has been recalled in Parliament, with women’s safety taking precedence over the Reservation Bill in the Lok Sabha on International Women’s Day.So,lets see how it goes and helps in preventing and responding to the sexual harassment.

This article is authored by Payal Anand from IIM Indore

NURTURING MODERN DAY HR

by 
Kavea from TAPMI

Ever wondered what does it take to retain employees like you are a pro in doing it? Ever wondered what it felt like to have your employees say ‘My office is my second home’? Ever wondered how it will feel like when your team gels really well and you being the secret brains behind it?

In the modern era, when attrition rates are on the rise, where more and more companies are looking for new ways of recruiting and retaining employees who can perform extremely well under pressure, who can adapt and deliver, we definitely should turn around and look out for ways to enhance their satisfaction level. No more will satisfying the hygiene factors work. One has to go well beyond it to satisfy even their implied needs. There lies the competitive advantage in terms of HR for a company. That’s exactly why some companies are investing huge sums of money in their yearly budget to identify the needs of employees from their innermost hearts.
Image Courtesy: freedigitalphotos.net

Leveraging on this fact, a lot of recreation plans are created every now and then, in addition to development centers of a company, where one socializes, relaxes. If they can also get the sense of belongingness to the company, “Woohoo! Target achieved!”

While some companies are going all out on employee benefits, a recent drastic measure employed by Yahoo Inc’s Marrissa Mayer, the new CEO, comes as a shocker. She has coiled back to traditional ways of working by curbing the scheme of working from home and insisted on face to face communication as opposed to flexibility. She believes that employees’ productivity goes up while they work from home whereas their innovation quotient takes a drastic dip. We will have to wait and see how the tradeoff between innovation and productivity, valuing flexibility and thereby alienating the independent minded employees, works for Yahoo. (Sarcasm says, “Past results prove otherwise”).

Results of a study in the field of home-work and productivity from Stanford says that telecommuting is nothing to be afraid of and it vouches for higher satisfaction levels among employees. Flexi work hours, though is a topic of debate, proves to be a deal-clincher as is shown in ‘Best employer ratings’ (Source: Business today, Economic times) where Google’s break out rooms, Agilent’s ‘Coffee talks’ and Infosys’s dormitories, ECCs (Employee care centers) are giving them the edge. Though enhancing one’s career plays the major part of the rankings, the ‘mind play’ is the game-changer. American express tops the employee satisfaction list as the employees feel that the company caters to the Gen Y needs. Companies like Aetna where 47% of people telecommute and Booz Allen still embrace flexibility while they claim that it greatly reduces their real estate costs and fuel costs.

Goodbye to the ages of making employees adapt to the policies. Embrace and welcome the age where policies and initiatives are formed by the feedback of employees. Nurture HR.

This article has been authored by Kavea from TAPMI

References:
http://economictimes.indiatimes.com/best_company_2012.cms
http://articles.economictimes.indiatimes.com/2013-02-27/news/37330998_1_workplace-flexibility-yahoo-ceo-marissa-mayer-innovation

POACHING OR NO POACHING?

by 
S. Priya,
 Lal Bahadur Institute of Management

Recruitment challenges are ever increasing and it is getting tougher and tougher to hire the right candidate for a job opening. The high growth rate in sectors like Technology and Retail, existing talent crunch and the increase in the number of start-ups are the main reasons for the rising challenges in recruitment. Poaching, as a recruitment strategy, has been debatable. Some hold the view of it being unethical and illegal. But, poaching is a wide-spread practice and companies not accepting to the fact are losing their employees to their competitors. There have been instances in the recent past where Non-Compete or Non-Solicitation agreements have not worked in favour of companies. Poaching is ethical as long as the intention is not to capture the employer’s customers or to sabotage the business operations.


image:freedigitalphotos.net

Poaching or No Poaching?
This is an ethical dilemma companies are in when filling niche positions. It was towards the nineteenth century that the employer-employee relationship shifted to a voluntary relation, where the power is distributed.
It has been defined as ‘the intentional actions of recruiters in one company to identify, contact, solicit and hire a currently employed individual or group of individuals away from another company.’
Poaching is a wide practice, it accounts for 30 percent of the movement in labour. The sectors like IT, technology, retail etc. are booming, NASSCOM and McKinsey predicts that the jobs technology space will increase ten-fold from the current 60,000 professionals to over 6 lacs people by 2015, and the recent increase in the number of start-ups is also fuelling hiring. Adding to this, there lack of readily available talent in India.
Poaching should be accepted, and even encouraged, to make companies more competitive. Moreover, any sort of Non-Solicitation agreement between organisations is unjustifiable under the current socio-economic conditions. The Non-Compete agreement between the employer and the employee is not legally enforceable. Organisations can’t bar an employee from venturing out of the organisation. Employees are to be treated as free people and not as subjects or assets that a company owns. There is no ethical issue involved with poaching; the final employee always has the discretion to reject the offer. Poaching can, in a free market, help organisations to put their assets to the best use.
As offshore outsourcing goes mainstream in India, multinationals are hiring Indians to head their teams in foreign markets. Notably, Accenture and Capgemini are increasing poaching employees from their Indian rivals, like TCS, Wipro, and Infosys, to compete more effectively against these companies.
When Jet airways restrained its pilots from joining Sahara, on the grounds that it had made considerable investments in training them, the court ruled in favour of the pilots stating that the skills and the knowledge acquired are a property of the pilots and they were free to take up employment with Sahara.
In 2010, the U.S. department of Justice barred giants like Apple, Intel Corporation and others from entering into a non-solicitation agreement for employees.  E-bay has been sued for entering into a non-solicitation of employees with Intuit.
The ever increasing competition amongst companies, high growth rate, especially in sectors like IT technology & services, recent increase in the number of start-ups, rising concern due to Talent Crunch are the main reasons for increase in Poaching as a recruitment strategy. Multinationals are eying the right talent who can hit the ground from day one. Companies are looking to stay ahead by differentiating on products, processes, technology and a host of other things, hence require the right skill sets and knowledge. The high rate of growth in sectors like, technology is creating more and more jobs. But the readily employable graduates in India are less than 30%. This rising gap between the skills required and that is available is creating the need for HRs to look for talents in other organisations. Companies, for example Oracle, Hewlett-Packard and Cisco, are diversifying into other businesses; this is increasing competition in an industry.
Poaching becomes unethical or illegal when the candidate, for a job, is misled by a company about the job being offer. Some practices associated with poaching cross the line when the employee is hired to steal information or clients related to the employer. Anti-poaching agreements are relevant when two organisations are engaged in joint-venture.
Employees are poached from ‘vulnerable’ companies. The real issue lies in the employer-employee relationship; it is a failure of the company to retain its employees. The reasons could vary from the pay and benefits to the whole employee proposition or because of their bosses.
The HRs should pick up signs displayed by employees at work. The most frequent sign is change in habits related to work, i.e., there is lack of engagement with projects or colleagues, large number of absences, getting up-to-date information on expense accounts.
Companies have been taking several measures to retain and attract employees by benchmarking on their employment brand against the competitors. Being competitive in pay and benefits and in the whole employment proposition could be the key. Long term incentive plans tied to the success of the business as a whole and succession planning could send a message to the employees that they are significant role and are valuable to the success of the business. Employees also leave because of their bosses, to retain employees, the managers should be effective. Knowledge sharing and trainings such as, Supervisory training, Leadership training could instil useful management skills.
NASSCOM has advised companies to not to resort to Poaching, it has been working out strategies to deal with situations where a whole of a team is wiped out or when the intention is to sabotage the operations. NASSCOM has recommended companies to follow a standardized exit and on-boarding process and ask for relieving letters from the new joinees.
There are three important stakeholders, Organisations, Educational Institutions and NASSCOM. Steps need to be taken collectively to reduce the gap between available talent and required skills. Effective education and training in institutions is the need of the hour. The stakeholders should work out strategies to formulate the curriculum, specialised courses, offer more practical exposure, guest lecturers from veterans to the students.
The article has been authored by S. Priya, Lal Bahadur Institute of Management
Sources:
1. Do no-poaching agreements help innovation or hinder careers? www.edn.com.

2. Firms Poach Top Talent From Recession-Weary Rivals, Wall Street.

3. Ethics, Poaching and Competitive Intelligence, www.ere.net.

4. Poaching Staff May Leave You Swimming With The Sharks. www.frontlinerecruitmentgroup.com.

5. Employee poaching: Not so bad after all?, www.risesmart.com/blog.

6. IT cos should not resort to poaching: Nasscom, ET Bureau Apr 28, 2010.

7. In Business, Poaching Allowed, www.vanderbilt.edu/magazines/vanderbilt-magazine/2010/04.

8. Technology Talent Poaching to Get More Aggressive in 2011, web.ebscohost.com.

DEVELOPING NON-HIERARCHICAL LEADERSHIP: FROM COMMAND TO COLLABORATE

 by 
Rajesh Prasad, 
TAPMI, 
Manipal

A majority of the companies have an intensely rigid hierarchy of leadership into their system. This ushers managers the room to sustain and companies to leverage their strengths. Nevertheless for companies that aim to embark on new strategies, they need sustainable and competent leadership. This is possible only in highly dynamic environment, where hierarchical leadership structures are surpassed by innovation. Such an environment provides opportunities to employees regardless of their rank and helps propel the company into a commanding position through collaborative and participatory leadership.
image:freedigitalphotos.net
In the recent times there is an evident shift in many businesses and not-for-profit organizations—transition from the more traditional and hierarchical model of leadership towards collaborative leadership for ameliorating relationships with others. This type of leadership seeks to involve others in decision making, is strongly ethical, and assures the career growth of employees along with better quality of work-life.
The business leadership has now been dominated by managers who ruled their enterprises from the top down. In earlier times, influence of two World Wars was very evident, as the organizational hierarchies were designed similar to that in military, with an extensive hierarchy to establish control through rules and processes. The desire of power, status and money, is very well brought out in 1956’s classic- ‘The Organization Man’ of William H. Whyte and in 1955, ‘The Man in the Gray Flannel Suit’ by Sloan Wilson.
In the late twentieth century the short term nature of stock market, caused business leaders to focus on myopic gains which side-lined the long-term growth. This not only manifested itself in jitters like the ethical debacles exposed by Enron and WorldCom but also showed up in the Wall Street meltdown. Due to this, people started doubting the calibre of corporate leaders in structuring a sustainable institution since they were self-centric and myopic in intent.
Ever wondered what could have probably gone wrong in whatever transpired? Traditional hierarchical system’s failure could have been an answer in the right direction. Today most of the work force simply won’t respond to the command type of leadership. The new generation work force is not willing to wait in queue for getting promoted and seek more and more opportunities. They are focussed more on job satisfaction apart from the monetary benefits that they are entitled to. In many companies employees are motivated by the mission and values of the organization. Dynamic leaders are more focused on customers. Hierarchical leaders aimed only nearby goals and are oblivious of the larger picture. One leader who walked the talk is Mr Paul Polman, CEO- Unilever. He expressed his views as- "I don't work for any shareholder. I only work for my customers."
Off late, the leaders are more focussed on the alignment between employees and the organization mission, vision and values. This helps empower the leaders and makes them perform through collaboration within the organization.
The following characteristics of these collaborative leaders contribute to their meaningful practice of non-hierarchical leadership:
Listening: They need to possess a strong commitment to listening others intently. They need to listen receptively to what is being explicit and implicit. Listening to one’s own inner voice is equally important. Reflection in the interim is conducive for the growth and advancement.
Aligning: Proper alignment of employees along company's mission is of utmost importance. Multi-national organizations where employees are more attached to local cultures instead of the company’s work culture, alignment becomes even more complex.
Listening: Johnson & Johnson is a stunning example where organization has aligned their employees perfectly and thereby directed them for performing in alignment with goals of the company. Traditional hierarchical leadership has been proved to be out of place and it has never been able to tackle the work place deviance. Diligent alignment of employees makes them responsible for the larger good of the organization which is something greater than their individual gains.
Empowering: The manner in which hierarchical leadership exercises its power is through command and taking total control of their subordinates. On the contrary, the non-hierarchical leadership traits enable the leaders to take control of the position by empowering the various leaders at different designations. The leaders at every level thus set excellent work standards for others to emulate in a conducive and collaborative atmosphere. The satisfaction out of this kind of quality work surpasses the feelings of individualistic and myopic gains.
Serving: New generation leadership believe that employees possess an intrinsic value apart from their tangible work performance. So, they are religiously committed for the growth of every single employee within the company. The leader should sense the innate responsibility of nurturing the professional and personal growth of the employees, off course within their gamut of power. Customer satisfaction and purposeful employees becomes the key for sustainable competitive advantage.
Collaborative: The leaders need to be persuasive and convincing others for taking a course of action, rather than using their positional authority for coercion. This aspect offers a very lucid distinction between the traditional authoritarian leadership model and the collaborative leadership model. The importance of persuasion instead of coercion has been corroborated by the Religious Society of Friends, Quakers, Britain (UK). Collaboration within the organization, with the customers and consumers and with the suppliers is a prerequisite for sustained solutions and services.
Generational Intelligence: The caliber to reflect and act, with an understanding of one’s own and other’s life-course, family and social history, placed within its social and cultural context. It needs the leader to place himself in the position of a person of a different age or generation while working towards sustainable solutions.
Summarizing the process - From Command to Collaborate:
The changing nature of the complexity of the business problems have brought out the inability of the organizations and individuals in solving it for lasting results. This has led to the need for a more collaborative and coherent yet diverse and innovative leadership within the organization.
The following initiatives will help the transition:
1.    Team Work & Team building
2.    Strong Reverse feedback mechanism
3.    Strong Legal Compliance & Grievance handling mechanism
4.    Strong basis for Performance Management
5.    Rewards & Recognition (Given to the performing associates from time to time)
6.    Brain Storming sessions with the team for decisions to be taken
7.    Strong upward & downward communication (Transparent processes)
8.    Developing a positive & employee friendly work culture
9.    Flexibility in work timings & work operations
10.  Social networking & socializing opportunities to be given to the employees.

The article has been authored by Rajesh Prasad, TAPMI, Manipal

Role of Microfinance Institutions in Rural Development

By

Rajarajeswari L
Asst. Professor
Department of Business Adminsitration
Arul Anandar College
Karumathur-625514, Madurai District.

More than subsidies poor need access to credit. Absence of formal employment make them non 'bankable'. This forces them to borrow from local moneylenders at exorbitant interest rates. Many innovative institutional mechanisms have been developed across the world to enhance credit to poor even in the absence of formal mortgage. The present paper discusses conceptual framework of a microfinance institution in India. The successes and failures of various microfinance institutions around the world have been evaluated and lessons learnt have been incorporated in a model microfinance institutional mechanism for India.


1. MICRO-FINANCE AND POVERTY ALLEVIATION

Most poor people manage to mobilize resources to develop their enterprises and their dwellings slowly over time. Financial services could enable the poor to leverage their initiative, accelerating the process of building incomes, assets and economic security. However, conventional finance institutions seldom lend down-market to serve the needs of low-income families and women-headed households. They are very often denied access to credit for any purpose, making the discussion of the level of interest rate and other terms of finance irrelevant. Therefore the fundamental problem is not so much of unaffordable terms of loan as the lack of access to credit itself.

The lack of access to credit for the poor is attributable to practical difficulties arising from the discrepancy between the mode of operation followed by financial institutions and the economic characteristics and financing needs of low income households. For example, commercial lending institutions require that borrowers have a stable source of income out of which principal and interest can be paid back according to the agreed terms. However, the income of many self employed households is not stable, regardless of 
its size. A large number of small loans are needed to serve the poor, but lenders prefer dealing with large loans in small numbers to minimize administration costs. They also look for collateral with a clear title - which many low-income households do not have. In addition bankers tend to consider low income households a bad risk imposing exceedingly high information monitoring costs on operation.

Over the last ten years, however, successful experiences in providing finance to small entrepreneur and producers demonstrate that poor people, when given access to responsive and timely financial services at market rates, repay their loans and use the proceeds to increase their income and assets. This is not surprising since the only realistic alternative for them is to borrow from informal market at an interest much higher than market rates. 

Community banks, NGOs and grass root savings and credit groups around the world have shown that these micro enterprise loans can be profitable for borrowers and for the lenders, making microfinance one of the most effective poverty reducing strategies. To the extent that microfinance institutions become financially viable, self sustaining, and integral to the communities in which they operate, they have the potential to attract more resources and expand services to clients. 

Despite the success of microfinance institutions, only about 2% of world's roughly 500 million small entrepreneurs is estimated to have access to financial services (Barry et al. 1996). Although there is demand for credit by poor and women at market interest rates, the volume of financial transaction of microfinance institution must reach a certain level before their financial operation becomes self sustaining. 

In other words, although microfinance offers a promising institutional structure to provide access to credit to the poor, the scale problem needs to be resolved so that it can reach the vast majority of potential customers who demand access to credit at market rates. The question then is how micro enterprise lending geared to providing short term capital to small businesses in the informal sector can be sustained as an integral part of the financial sector and how their financial services can be further expanded using the principles, standards and modalities that have proven to be effective. To be successful, financial intermediaries that provide services and generate domestic resources must have the capacity to meet high performance standards. They must achieve excellent repayments and provide access to clients. 

And they must build toward operating and financial selfsufficiency and expanding client reach. In order to do so, microfinance institutions need to find ways to cut down on their administrative costs and also to broaden their resource base. Cost reductions can be achieved through simplified and decentralized loan application, approval and collection processes, for instance, through group loans which give borrowers responsibilities for much of the loan application process, allow the loan officers to handle many more clients and hence reduce costs (Otero et al. 1994).

Microfinance institutions can broaden their resource base by mobilizing savings, accessing capital markets, loan funds and effective institutional development support. A logical way to tap capital market is securitization through a corporation that purchases loans made by micro enterprise institutions with the funds raised through the bonds issuance on the capital market. There is at least one pilot attempt to securitize microfinance portfolio along these lines in Ecuador. As an alternative, BancoSol of Bolivia issued a certificate of deposit which are traded in Bolivian stock exchange. In 1994, it also issued certificates of deposit in the U.S. (Churchill 1996). The Foundation for Cooperation and Development of Paraguay issued bonds to raise capital for micro enterprise lending (Grameen Trust 1995). 

Savings facilities make large scale lending operations possible. On the other hand, studies also show that the poor operating in the informal sector do save, although not in financial assets, and hence value access to client-friendly savings service at least as much access to credit. Savings mobilization also makes financial institutions accountable to local shareholders. Therefore, adequate savings facilities both serve the demand for financial services by the customers and fulfil an important requirement of financial sustainability to the lenders. Microfinance institutions can either provide savings services directly through deposit taking or make arrangements with other financial institutions to provide savings facilities to tap small savings in a flexible manner (Barry 1995).

Convenience of location, positive real rate of return, liquidity, and security of savings are essential ingredients of successful savings mobilization (Christen et al. 1994). Once microfinance institutions are engaged in deposit taking in order to mobilize household savings, they become financial intermediaries. Consequently, prudential financial regulations become necessary to ensure the solvency and financial soundness of the institution and to protect the depositors. However, excessive regulations that do not consider the nature of microfinance institution and their operation can hamper their viability. In view of small loan size, microfinance institutions should be subjected to a minimum capital requirement which is lower than that applicable to commercial banks. On the other hand, a more stringent capital adequacy rate (the ratio between capital and risk assets) should be maintained because microfinance institutions provide uncollateralized loans. 

Governments should provide an enabling legal and regulatory framework which encourages the development of a range of institutions and allows them to operate as recognized financial intermediaries subject to simple supervisory and reporting requirements. Usury laws should be repelled or relaxed and microfinance institutions should be given freedom of setting interest rates and fees in order to cover operating and finance costs from interest revenues within a reasonable amount of time. Government could also facilitate the process of transition to a sustainable level of operation by providing support to the lending institutions in their early stage of development through credit enhancement mechanisms or subsidies. 

One way of expanding the successful operation of microfinance institutions in the informal sector is through strengthened linkages with their formal sector counterparts. A mutually beneficial partnership should be based on comparative strengths of each sectors. Informal sector microfinance institutions have comparative advantage in terms of small transaction costs achieved through adaptability and flexibility of operations (Ghate et al. 1992). They are better equipped to deal with credit assessment of the urban poor and hence to absorb the transaction costs associated with loan processing. On the other hand, formal sector institutions have access to broader resource-base and high leverage through deposit mobilization (Christen et al. 1994).

Therefore, formal sector finance institutions could form a joint venture with informal sector institutions in which the former provide funds in the form of equity and the later extends savings and loan facilities to the urban poor. Another form of partenership can involve the formal sector institutions refinancing loans made by the informal sector lenders. Under these settings, the informal sector institutions are able to tap additional resources as well as having an incentive to exercise greater financial discipline in their management.

Microfinance institutions could also serve as intermediaries between borrowers and the formal financial sector and on-lend funds backed by a public sector guarantee (Phelps 1995). Business-like NGOs can offer commercial banks ways of funding micro entrepreneurs at low cost and risk, for example, through leveraged bank-NGO-client credit lines. Under this arrangement, banks make one bulk loan to NGOs and the NGOs packages it into large number of small loans at market rates and recover them (Women's  World Banking 1994). There are many on-going research on this line but context specific research is needed to identify the most appropriate model. With this in mind we discuss various possible alternatives of formal-informal sector linkages in India. In this context, following strategic, institutional and connectivity issues related to micro-finance arise.

Strategic Issues

* Is there a prevailing paradigm for micro-finance?
* Are there clearly visible pattern across the country?
* Is there a clearly defined foundation building blocks such as organizing principles, gender preferences and operational imperatives?
* What are methodological issues?

Institutional Issues

* Is there a need for a new institution?
* Should it operate all India or in a state?
* Where should it be located?
* Who can lead an institution of this sort?
* What will its contextual interconnections be?
* Who will be its beneficiaries?

Connectivity Issues

* How should the Corporate Financial Sector be involved?
* What is the role of donor agencies?
* How should communities be involved?
* Are there political issues that should be explicitly considered?
* Are there government policy issues?

2. THE FORMAL SECTOR INSTITUTIONS

Traditionally, the formal sector Banking Institutions in India have been serving only the needs of the commercial sector and providing loans for middle and upper income groups. Similarly, for housing the HFIs have generally not evolved a lending product to serve the needs of the Very LIG primarily because of the perceived risks of lending to this sector. Following risks are generally perceived by the formal sector financial institutions:

* Credit Risk;
* High transaction and service cost;
* Absence of land tenure for financing housing;
* Irregular flow of income due to seasonality;
* Lack of tangible proof for assessment of income;
* Unacceptable collaterals such as crops, utensils and jewellery.

As far as the formal financial institutions are concerned there are Commercial Banks, Housing Finance Institutions (HFIs), NABARD, Rural Development Banks (RDBs), Land Development Banks Land Development Banks and Cooperative Banks (CBs).

As regards the Co-operative Structures, the Urban Co.op Banks (UCB) or Urban Credit Co.op Societies (UCCS) are the two primary co-operative financial institutions operating in the urban areas. There are about 1400 UCBs with over 3400 branches in India having 14 million members, Their total lending outstanding in 1990-91 has been reported at over Rs 80 billion with deposits worth Rs 101 billion. 

Similarly there exist about 32000 credit co.op societies with over 15 million members with their total outstanding lending in 1990-91 being Rs 20 billion with deposits of Rs 12 billion. Few of the UCCS also have external borrowings from the District Central Co.op Banks (DCCBs) at 18-19%. The loans given by the UCBs or the UCCS are for short term and unsecured except for few which are secured by personal guarantees. The most effective security being the group or the peer pressure. The Government has taken several initiatives to strengthen the institutional rural credit system. The rural branch network of commercial banks have been expanded and certain policy prescriptions imposed in order to ensure greater flow of credit to agriculture and other preferred sectors. The commercial banks are required to ensure that 40% of total credit is provided to the priority sectors out of which 18% in the form of direct finance to agriculture and 25% to priority sector in favour of weaker sections besides maintaining a credit deposit ratio of 60% in rural and semiurban branches. Further the IRDP introduced in 1979 ensures supply of credit and subsidies to weaker section beneficiaries. Although these measures have helped in widening the access of rural households to institutional credit, vast majority of the rural poor have still not been covered. Also, such lending done under the poverty alleviation schemes suffered high repayment defaults and left little sustainable impact on the economic condition of the beneficiaries.

3. THE EXISTING INFORMAL FINANCIAL SOURCES

The informal financial sources generally include funds available from family sources or local money lenders. The local money lenders charge exorbitant rates, generally ranging from 36% to 60% interest due to their monopoly in the absence of any other source of credit for non conventional needs. Chit Funds and Bishis are other forms of credit system operated by groups of people for their mutual benefit which however have their own limitations. 

Lately, few of the NGOs engaged in activities related to community mobilization for their socio-economic
development have initiated savings and credit programmes for their target groups. These Community based financial systems (CBFS) can broadly be categorized into two models: Group Based Financial Intermediary and the NGO Linked Financial Intermediary. Most of the NGOs like SHARAN in Delhi, FEDERATION OF THRIFT AND CREDIT ASSOCIATION (FTCA) in Hyderabad or SPARC in Bombay have adopted the first model where they initiate the groups and provide the necessary management support. Others like SEWA in Ahmedabad or BARODA CITIZEN's COUNCIL in Baroda pertain to the second model. 

The experience of these informal intermediaries shows that although the savings of group members, small in nature do not attract high returns, it is still practiced due to security reasons and for getting loans at lower rates compared to that available from money lenders. These are short term loans meant for crisis, consumption and income generation needs of the members. The interest rates on such credit are not subsidized and generally range between 12 to 36%. Most of the loans are unsecured. In few cases personal or group guarantees or other collaterals like jewellery is offered as security.

While a census of NGOs in micro-finance is yet to be carried out, there are perhaps 250-300 NGOs, each with 50- 100 Self Help Groups (SHG). Few of them, not more than 20-30 NGOs have started forming SHG Federations. There are also agencies which provide bulk funds to the system through NGOs. Thus organizations engaged in micro finance activities in India may be categorized as Wholesalers, NGOs supporting SHG Federations and NGOs directly retailing credit borrowers or groups of borrower. 

The Wholesalers will include agencies like NABARD, Rashtriya Mahila Kosh-New Delhi and the Friends of Women's World Banking in Ahmedabad. Few of the NGOs supporting SHG Federations include MYRADA in Bangalore, SEWA in Ahmedabad, PRADAN in Tamilnadu and Bihar, ADITHI in Patna, SPARC in Mumbai, ASSEFA in Madras etc. While few of the NGOs directly retailing credit to Borrowers are SHARE in Hyderabad, ASA in Trichy, RDO Loyalam Bank in Manipur.

4. CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES

HDFC has been making continuous and sustained efforts to reach the lower income groups of society, especially the economically weaker sections, thus enabling them to realize their dreams of possessing a house of their own.

HDFCs' response to the need for better housing and living environment for the poor, both, in the urban and rural sectors materialized in its collaboration with Kreditanstalt fur Wiederaufbau (KfW), a German Development bank. KfW sanctioned DM 55 million to HDFC for low cost housing projects in India. HDFCs' approach to low-income lending has been extremely professional and developmental in nature. Negating the concept of dependence, HDFCs' low cost housing schemes are marked by the emphasis on 
peoples participation and usage of self-help approach wherein the beneficiaries contribute both in terms of cash and labour for construction of their houses. HDFC also ensures that the newly constructed houses are within the affordability of the beneficiaries, and thus promotes the usage of innovative low cost technologies and locally available materials for construction of the houses. 

For the purpose of actual implementation of the low cost housing projects, HDFC collaborates with organisations, both, Governmental and Non-Governmental. Such organisations act as co-ordinating agencies for the projects involving a collective of individuals belonging to the Economically Weaker Sections. The projects could be either in urban or rural areas. The security for the loan is generally the mortgage of the property being financed. The construction work is regularly monitored by the co-ordinating agencies and HDFC. The loans from HDFC are disbursed depending upon the stages of construction. To date, HDFC has experienced 100% recovery for the loans disbursed to various projects.

5. STRENGTHS OF INFORMAL SECTOR

A synthesis that can be evolved out of the success of NGOs/ CBOs engaged in microfinance is based on certain preconditions, institutional and facilitating factors.

5.1. Preconditions to Success

Those NGOs/ CBOs have been successful that have istilled financial value/ discipline through savings and have demonstrated a matching value themselves before lending. A recovery system based on social intermediation and various options including non-financial mechanisms has proved to be effective. Another important feature has been the community governance. The communities in which households are direct stake holders have successfully demonstrated the success of programs. A precondition for success is to involve community directly in the program. 

Experience indicates that savings and credit are both critical for success and savings should precede credit. Chances of success more with women: Programs designed with women are more successful.

5.2. Operating Indicators

The operating indicators show that programs which are designed taking into account the localized and geographical differences have been successful. Effective and responsive accounting and monitoring mechanisms have been an important and critical ingradient for the success of programs. The operational success has been more when interest rates are at or near market rates: The experience of NGOs/CBOs indicates that low income households are willing to pay market rates. The crucial problem is not the interest rates but access to finance. Eventually in absence of such programs households end up paying much higher rates when borrowing from informal markets. Some NGOs have experimented where members of community decide on interest rates. This is slightly different from Thailand experience where community decides on repayment terms and loan amount. A combination of the three i.e. interest rates, amount and repayment period if decided by community, the program is most likely to succeed. A program which is able to leverage maximum funds from formal market has been successful. Experience indicates  that it is possible to leverage higher funds against deposits. 

The spreads should be available to meet operational costs of NGOs. Most of the directed credit program in India like Kfw have a ceiling on the maximum interest rate and the spread available to NGOs. A flexible rate of interest scheme would indicate a wider spread for NGOs. Selected non-financial services, viz. business, marketing support services enhance success. Appropriate incentives for borrowing and proper graduation of credit has been essential component of success. A successful program can not be generalized for all needs and geographical spread. The programs which are simple and replicable in similar contexts have contributed to success. 

Betterment in quality of life through better housing or better economic opportunities is a tangible indicator of success. The programs which have been able to demonstrate on some measurable scale that the quality of life has improved have been successful. To be successful the program productivity with outreach should match. The credit mechanism should be flexible meeting multiple credit needs: The programs which have taken care of other needs such as consumption, marriage etc. besides the main  shelter, infrastructure or economic needs are successful.

5.3. Facilitating Factor

Another factor that has contributed to the success is the broad environment. A facilitative environment and enabling regulatory regime contributes to the success. The NGOs/ CBOs which have been able to leverage funds from formal programs have been successful. An essential factor for success is that all development programs should converge across sectors.

6. WEAKNESSES OF EXISTING MICROFINANCE MODELS

One of the most successful models discussed around the world is the Grameen type. The bank has successfully served the rural poor in Bangladesh with no physical collateral relying on group responsibility to replace the collateral requirements. This model, however, has some weaknessed. It involves too much of external subsidy which is not replicable Grameen bank has not oriented itself towards mobilising peoples' resources. The repayment system of 50 weekly equal instalments is not practical because poor do not have a stable job and have to migrate to other places for jobs. If the communities are agrarian during lean seasons it becomes impossible for them to repay the loan. Pressure for high repayment drives members to money lenders. Credit alone cannot alleviate poverty and the Grameen model is based only on credit. Micro-finance is time taking process. Haste can lead to wrong selection of activities and beneficiaries.

Another model is Kerala model (Shreyas). The rules make it difficult to give adequate credit {only 40-50 percent of amount available for lending). In Nari Nidhi/Pradan system perhaps not reaching the very poor.

Most of the existing microfinance institutions are facing problems regarding skilled labour which is not available for local level accounting. Drop out of trained staff is very high.

One alternative is automation which is not looked at as yet. Most of the models do not lend for agriculture. Agriculture lending has not been experimented. 

* Risk Management : yield risk and price risk;
* Insurance & Commodity Future Exchange could be explored.

All the models lack in appropriate legal and financial structure. There is a need to have a sub-group to brainstorm on statutory structure/ ownership control/ management/ taxation aspects/ financial sector prudential norms. A forum/ network of micro-financier (self regulating organization) is desired.

7. A NEW PARADIGM

A new paradigm that emerges is that it is very critical to link poor to formal financial system, whatever the mechanism may be, if the goal of poverty allieviation has to be achieved. NGOs and CBOs have been involved in community development for long and the experience shows that they have been able to improve the quality of life of poor, if this is an indicator of development. The strengths and weaknesses of existing NGOs/CBOs and microfinance institutions in India indicate that despite their best of efforts they have not been able to link themselves with formal systems. It is desired that an intermediary institution is required between formal financial markets and grassroot. The intermediary should encompass the strengths of both formal financial systems and NGOs and CBOs and should be flexible to the needs of end users. There are, however, certain unresolved dilemmas regarding the nature of the intermediary institutions. There are arguments both for and against each structure. These dilemmas are very contextual and only strengthen the argument that no unique model is applicable for all situations. They have to be context specific.

DILEMMAS


Community Based
Investor Owned
Community Managed
Professionally managed
Community (self) financed for on-lending
Accepting outside funds
Integrated (social & finance)
Minimalist (finance only)
Non profit / mutual benefit
For profit
Only for poor
For all under served clients
Self regulated'Externally regulated



The four pillars of microfinance credit system (Fig. 1) are supply, demand for finance, intermediation and regulation. Whatever may the model of the intermediary institution, the end situation is accessibility of finance to poor. The following tables indicate the existing and desired situation for each component.





DEMAND


Existing Situation
Desired Situation
Fragmented
Professionally managed
Community Managed
Organized
Undifferentiated
Differentiated (for consumption, housing)
Addicted, corrupted by capital & subsidies
Deaddicted from capital & subsidies
Communities not aware of rights and responsibilitiesAware of rights and responsibilities



SUPPLY


Existing Situation
Desired Situation
Grant based (Foreign/GOI)
Regular fund sources (borrowings/deposits)
Directed Credit - unwilling
Demand responsive and corrupt
Not linked with mainstream
Part of mainstream (banks/ FIs)
Mainly focussed for credit
Add savings and insurance
DominatedReduce dominance of informal, unregulated suppliers



INTERMEDIATION


Existing Situation
Desired Situation
Non specialized
Specialized in financial services
Not oriented to financial analysis
Thorough in financial analysis
Non profit capital
For profit
Not linked to mainstream FIs
Link up to FIs
Not organizedSelf regulating



REGULATION


Existing Situation
Desired Situation
Focused on formal service
include/informal recognize providers (informal not e.g. SHGs regulated)
regulating the wrong things
Regulate rules of game e.g. interest rates
Multiple and conflicting
Coherence and coordination  (FCRA, RBI, IT, ROC, across regulators MOF/FIPB, ROS/ Commerce)
Negatively oriented
Enabling environment



8. CONCLUSION

Some valuable lessons can be drawn from the experience of successful Microfinance operation. First of all, the poor repay their loans and are willing to pay for higher interest rates than commercial banks provided that access to credit is provided. The solidarity group pressure and sequential lending provide strong repayment motivation and produce extremely low default rates. Secondly, the poor save and hence microfinance should provide both savings and loan facilities. These two findings imply that banking on the poor can be a profitable business. However, attaining financial viability and sustainability is the major institutional challenge. Deposit mobilization is the major means for microfinance institutions to expand outreach by leveraging equity (Sacay et al 1996). In order to be sustainable, microfinance lending should be grounded on market principles because large scale lending cannot be accomplished through subsidies. 

A main conclusion of this paper is that microfinance can contribute to solving the problem of inadequate housing and urban services as an integral part of poverty alleviation programmes. The challenge lies in finding the level of flexibility in the credit instrument that could make it match the multiple credit requirements of the low income borrowers without imposing unbearably high cost of monitoring its end-use upon the lenders. 

A promising solution is to provide multi-purpose loans or composite credit for income generation, housing
improvement and consumption support. Consumption loan is found to be especially important during the gestation period between commencing a new economic activity and deriving positive income. Careful research on demand for financing and savings behaviour of the potential borrowers and their participation in determining the mix of multipurpose loans are essential in making the concept work (tall 1996).

Eventually it would be ideal to enhance the creditworthiness of the poor and to make them more "bankable" to financial institutions and enable them to qualify for long-term credit from the formal sector. Microfinance institutions have a lot to contribute to this by building financial discipline and educating borrowers about repayment requirements.

REFERENCES

[1] Barry, N.(1995), "The Missing Links: Financial System that Works for the Majority," Women's World Banking, NewYork. 

[2] Barry, Nancy, Armacost, Nicola and Kawas Celina (1996) "Putting Poor People's Economics at the Center of Urban Strategies," Women's World Banking, New York.

[3] Chriseten, R.Peck Rhyne, Elisabeth and Vogel, Robert C (1994) "Maximizing the Outreach of Microenterprise Finance: The Emerging Lessons of Successful Programs," September IMCC, Arlington, Virginia.

[4] Churchill, C.F. (1996)," An Introduction to Key Issues in Microfinance: Supervision and Regulation, Financing Sources, Expansion of Microfinance Institutions," Microfinance Network, Washington, D.C. February.

[5] Kim Kyung-Hwan (1995) "Access to Credit, Term of Housing Finance and Affordability of Housing,"Housing Finance International, 9(4), June 22-27.

[6] Otero, M. and Rhyne, E.(1994) "The New World of Microenterprise Finance -Building Healthy Financial Institutions for the Poor", Kumarian Press, West Harford, Connecticut. 

[7] Phelps, P.(1995) "Building Linkages Between the Microenterprise and Shelter Sectors: An Issues Paper," GEMINI, Betuesda, Maryland.

[8] UNCHS and ILO (1995) Shelter Provision and Employment Generation, Geneva.

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