In 2009, Suresh K Krishna, Managing
Director, Grameen Koota, at a speech at the International Convention of
Microfinance, organized by Institute of Applied Management stressed the need of
management graduates to join the microfinance sector and take it forward
professionally. Recent trends among B schools show that graduates are, indeed
taking his words seriously.
The microfinance industry in India,
which can trace its origins to the early 1970-s, faced its worst crisis in end
of 2010- 2011. The Andhra Pradesh Govt, in October 2010, passed the legislation
effectively shutting down all private sector microfinance institutions in the
state. But with the RBI in control now, things have started improving.
However, as the industry revived and
microfinance companies again started seeing profits the changes were not only
inevitable, it was already being planned. While rates of interest decreased,
there were significant developments in the technological application and cost
effective management techniques. The most important need of the hour was to
hire suitable talent to lead the microfinance institutions into the next level
of effectiveness and efficiency. And hence, the need for management graduates
with training in the tools of the trade to do this.
On the other hand are the new breeds
of management graduates who are also looking to make a difference in their
society, in their surrounding environment. Students from premier B schools,
IIMs and XLRI are now willing to forego hefty pay packages to join a micro
finance institution and make a difference. Thus in 2011, Janalakshmi Financial
Services, hired their first IIM graduate from IIM Lucknow. More recently, they
again hired, this time from IIM-B. And the good news is the level of interest
Janalakshmi created in IIM-B. they had received 17 resumes from the passing out
batch. They have also hired from TISS, Tata Institute of Social Sciences and other
management schools. In 2014, they are returning to the IIMs for placement
season. Suffice it to say that V S Radhakrishnan, the MD and CEO of
Janalakshmi, is an IIM-A graduate himself. While Bandhan Microfinance has hired
from IIMs (16 in 2013), other institutions like Ujjivan have gone for
institutes like XIM, Bhuvaneshwar or TISS.
While Indian students show a growing
interest in the Indian microfinance industry, this interest has come to our
notice from foreign universities too. From London Business School to Seoul
University, from Nigerian University to Middle Eastern colleges to Carnegie
Mellon, there are students from all over the world who wants to be part of the
microfinance industry and ready to work in India.
Most of the above is true for
seasoned executives who have scored in boardrooms for some time now. While they
have already tasted success in their respective industries and companies, they
are not averse to having microfinance in their repertoire. In fact, as an
executive search firm, we have seen the change in the last few years, where it
has not become relatively easy to convince anyone on taking up an opportunity
in microfinance.
Whether it is Suresh Gurumani, who
had joined SKS as CEO from Barclays Bank, or its present CEO M R Rao who joined
SKS from ING Vysya, it is evident more than ever now, that microfinance is
indeed the new investment banking. And it is not just the bankers who are
looing up and noticing such opportunities. High ranking executives from
companies like Walt Disney, Sony, Reliance Communications, Asian Paints or even
E-Bay has been keen on trying out opportunities with companies like Grameen
Koota, Hope Microfinance or Madura Microfinance Ltd. And yes, incidentally many
of them also happen to be IIM graduates.
With new technology and new
processes in place, microfinance institutions see themselves as any other bank
but with smaller valuations. And they are planning to grow. However not all
companies can yet pay B school graduates what they expect. So many companies
have started internship programs with students from business schools, both from
India and abroad. And there are plenty of students interested, says C S Ghosh,
chairman and MD of Bandhan, who goes for talks at IIM Calcutta.
But what are they getting in return,
apart from giving back to society. It is also bringing them adequate exposure
which will stand them good stead in their careers later in life. Microfinance
is banking with the poor, and this field knowledge gives them the knowledge
base to go on for bigger assignments.
While the option is easier with
management graduates, the pay factor is more intensely felt in the case of
senior executives. While some companies are indeed willing to match other
industries for the right person who will catapult the company to a different
league, many microfinance companies are still struggling to pay the high
salaries senior executives can command in the market. However, it is often seen
that executives are often more willing than not to take a cut in their pay in
order to be part of the new era of microfinance. What excites them is the
opportunity to make a real positive difference to a company which will take
them ahead and meet or exceed their goals. These people are great change managers
with the zeal and ability to lead companies into a growth oriented future.
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