Microfinance and Loan Officers’ Work Experiences: Perspectives from Zambia

Abstract

The article studies the challenges faced by microfinance institutions in Zambia, whose remit it is to provide financial services to the poor. It focuses on loan officers -the agents of delivery on the ground. With reference to loan officers' experiences and words, the paper examines how gender and class shape and structure their day to day encounters. The study finds that different social spaces -'the office' and 'the field' -and wider context explains the gendered, culturally complex and multidimensional nature of developmental work at grassroots level. Social expectations emerge as major pressure points more for female loan officers than their male counterparts, making them less suitable for microfinance work, which has traditionally targeted poor women. However, in the process of delivering financial services, managers and clients not only come to depend on loan officers to maintain the quality of services provided, but also place varied and often conflicting expectations on them. Notwithstanding loan officers' critical role in the functioning of microfinance, less scholarship has focused on their work realities and how their everyday encounters at the grassroots with borrowers can leave them disillusioned with the seemingly 'noble' work of microfinance. Little is known, for example, about how social factors such as education, gender and location influence and complicate the work of loan officers in extending credit and other financial services to the poor. In addition, less is known about whether male and female loan officers consequently perform or are judged differently.As the analysis of two Zambian MFIs will show, these social factors do structure loan officer-client encounters and are capable of adding complexities to an already difficult jobespecially for female loan officers. Examining how education, gender and location intersect 1 Other titles such as field staff, credit officers and fieldworkers have also been used to refer to such MFI employees. This study adopts the title of loan officers. 2 Microfinance generally includes a range of financial services, including loans, savings deposits, insurance and money transfers provided to low income clients who lack formal financial access (Tomaselli et al., 2013). In this study we focus on provision of microcredit in a group-based lending methodology.

Fostering micro-entrepreneurs’ structural and relational social capital through microfinance

“…Thus, there is an incentive for group members to monitor the projects of one another to ensure that the loan is properly used to avoid repayment default. Additionally, group-based microfinance programs often rely on frequent interactions between loan officers and borrowers through regular visits and group meetings (Siwale 2016).…”

“…Thus, this suggests that local microfinance professionals without a business-related university degree can also play a significant role in terms of the provision of basic training and support to micro-entrepreneurs. Indeed, a recent study found that loan officers with lesser education find it easier to interact with the poor (Siwale 2016). Their mastery of the local context is an advantage.…”

“…With two billion people without access to formal financial services (Demirguc-Kunt et al 2015), microfinancethe provision of a range of financial services, including business loans denominated in small amounts to segments of the population that formerly had no access to formal financial services (Bruton et al 2015;Chen, Chang, and Bruton 2017;Servet 2015)has generated substantial interest in a number of academic disciplines (Armendariz and Morduch 2010;Beisland, D'Espallier, and Mersland 2017;David and Sanyal 2017;Haldar and Stiglitz 2016;Hossein 2016;Servet 2006;Siwale 2016;Taylor 2012), including entrepreneurship (Bruton, Khavul, and Chavez 2011;Chen, Chang, and Bruton 2017;Chliova, Brinckmann, and Rosenbusch 2015;Kar 2013;Khavul 2010;Kent and Dacin 2013;Milanov, Justo, and Bradley 2015;Moss, Neubaum, and Meyskens 2015;Newman, Schwarz, and Borgia 2014;Shahriar, Schwarz, and Newman 2016).…”

Microfinance Regulation and Social Sustainability of Microfinance Institutions: The Case of Nigeria and Zambia

“…Against this, the Association of Microfinance Institutions of Zambia (AMIZ) and other sources (Brouwers et al. ; Siwale ) estimate that the industry's outreach is approximately 300,000 against potential demand of over 2 million people. Data from the Microfinance Information Exchange (MIX) shows that the microfinance sector in Zambia recorded 71,978 borrowers as at December 2015 and a gross loan portfolio of USD 6.5 million.…”

Exploring microfinance initiatives and women in Sri Lanka: linking health and development

“…Additionally, while the literature is limited, insight about the gender bias in the recruitment of microfinance credit officers shed light on the (adverse) strategies used by MFIs. A study by Siwale (2016) in Zambia reported higher recruitment of male credit officers in MFIs, as males were perceived as better able to coerce and instil fear amongst female borrowers. Furthermore, a study by Beck et al (2013) found that between male and female credit officers, female officers were better at building trust relationships, screening and monitoring of borrowers, and less problematic in handling loans.…”