On 23rd February 2018, The Reserve Bank of India announced an ombudsman scheme for the purpose...
Change management is a vital issue of MFIs in today’s business environment, which changes constantly. Change has become a constant for business organizations and microfinance institutions, which need to change in order to remain competitive in the market. In the meantime, the ability to grasp manage this change is seen as a core capability of successful organizations.
The organizations in the form of various sizes offer a variety of products and services and face many challenges. “Perhaps the only common factor for all organizations is changing. Organizations and microfinance institutions must anticipate and respond to environmental changes in order to remain competitive and survive.
However, in reality, many change initiatives fail in achieving their objectives. This fact encourages interest to recognize those factors that affect the successful implementation of efforts to change organizations and microfinance institutions.
MFIs Change is the challenging than stable, more widespread and more powerful with which to confront every manager in every type of organization and in each geographic area.
No matter if they are young managers in the task or experience, they will face both the need and opportunity for change. The environment in which organizations operate is changing faster than themselves.
Organizations change because the environment around them never remains the same. Three of the most important challenges for management in the 21st century are: changing, technology and globalization.
Others factors like increasing competition in markets, globalization, reduction of barriers to entry in certain markets as a result of the internet and electronic business, the need to respond quickly to customer needs, sales and acquisitions, innovation, technology, reorganization, or sales decline market share, etc. are promoting change.
Change management of Microfinance Company is an important issue in today’s business environment, which changes constantly.
Relying on studies two important issues to believe is:
The rate of change has never been greater than in the present environment of business, and secondly, a change which is caused by internal factors or external comes in all forms of measures and affects all organizations in all industries.
In order to change the function, people should follow a plan to move from the current situation to the future situation.
All organizations need to change in order to remain competitive in the market and satisfy the growing needs of their customers and other pretenders to the organization. To endure in such an environment where competition is very aggressive, organizations must learn to manage change.
The microfinance industry has seen impressive growth for longer than a decade yet still reaches only a small percentage of its potential market worldwide. How do we reach those still un-banked? What steps can we take to make microfinance available to more people and do so on a lasting basis and provide them with the financial services they need other than just credit?
Many paths have emerged in response to these questions, including the downscaling of commercial banks and the creation of start-up, for-profit microfinance institutions.
MFIs Transit a Business Correspondent which offers multiple banking products is a significant change for most MFIs, which are typically used for providing credit alone. MFIs must make internal changes to become effective Business Correspondents.
The business correspondent model holds tremendous promise for furthering India’s ambitious financial inclusion goals. Microfinance institutions, with their wide, last-mile network spread out in remote villages, are poised to play a strategic role in this financial inclusion journey. However, the business correspondent business model is new for MFIs that previously focused on credit alone and this requires a systemic change in the way they operate. The attainment of the new model will depend on how successfully MFIs are able to engage their employees in executing this change.
Successful Transmission depends on the systemic change in the operation of MFIs. The first step is to initiate the Change. An organization cannot change unless its people embrace change first. MFIs shall manage the people aspect of change effectively to success the change. This means gauging where they currently are, as far as employee systems and processes go; and where they need to be. This involves –
The Change Management Process involves five key phases which are awareness phase, Understanding phase, Alignment phase, Commitment phase, implementation phase. The Assessment phase is critical to identifying what the HCM priorities and challenges in each phase are, that need to be prioritized and addressed.
Changes faced by various organizations are ranked by small changes to major changes/transformation. Resistance is a phenomenon that accompanies change, and its mismanagement or misunderstanding of the causes of resistance can make it turn into an obstacle to change.