Abstract
Microfinancing in Nigeria has developed from the traditional informal groups through direct government intervention to domination by private sector owned and managed institutions. Despite its long history, the sector has not witnessed the existence of sustainable institutions. This prompted the Obasanjo regime to adopt a more formal policy to improve the sector. Various reasons have contributed to the un-sustainability of microfinance institutions in the country. But the human resource factor is considered significant among all these. Using a historical and content analysis methods, this paper undertakes to examine the effect of poor human resource management generally on organizations and more specifically on the development of microfinance institutions in Nigeria. The paper analyzes some of the provisions of the Microfinance Policy, Regulatory and Supervisory Framework for Nigeria (2005) to explain in simple terms the human resource implications of some of the roles stipulated for key stakeholders of the microfinance institutions. The paper discovers that some of the factors that have affected the sustainability of microfniance institutions in Nigeria include poor skills development and lack of business initiative among the potential clients of the institutions, poor staff development, utilization and compensation in the institutions themselves and ineffective supervision and control of operators by the regulatory authorities. It is therefore, recommended among others actions that sustainability in the sector should preeminently concentrate efforts in capacity building of the poor, improvement of supervision and regulation by monetary authorities and ensuring proper employee development, utilization and compensation. These recommended actions must be collaborated by the key stakeholders whose roles were analyzed.
Highlights
The concept of human resource management (HRM) as applied in this paper is loosely understood to incorporate (i) the role of stake holders at the macro level to equip the microfinance clients with the skills, capacities and empowerment to benefit from the services provided by the microfinance institutions; (ii) the role of relevant stakeholders to control and regulate the activities of Microfinance Institutions Operators to imbibe the principles of good governance; and (iii) the role of relevant stakeholders to ensure the attraction, retention and adequate motivation of employees of the Micro-Finance Institutions (MFIs) to secure their full commitment to the progress of their enterprises
The paper has tried to show the need for managing human resources efficiently and effectively as a necessary condition for sustaining the microfinance institutions in the country
The implication of this at the macro level for stakeholders is that reasonable efforts must be made in building the capacity of the poor in terms of equipping them with necessary skills, business ideas and opportunities
Summary
Micro-Finance Institutions (MFIs) are meant to take care of the credit needs of some special class of citizens- the poor, which constitute a high percentage of the Nigerian population (about 70.2%). Efforts over the years to establish viable microfinance institutions have not yielded significant results in terms of their sustainability. This has informed the launching of the Microfinance Policy, Regulatory and Supervisory Framework for Nigerian in December 2005. The policy is expected to be a new beginning for microfinance in the country It has addressed comprehensively most of the issues that have contributed to poor performance in the sector and has made ample provisions for improvement. This paper investigates the human resource management aspect of the problems of microfinancing in Nigeria. Section three analyses the human resource management effect on microfinance institutions development in Nigeria and the new roles as they relate to key stake holders. The final section concludes the paper and highlights some recommendations derivable from the analysis
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