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ASA Institutional Action Plan


									                               Management Capacity Building for Reaching Large
                                                           Md. Shafiqual Haque Choudhury, Managing Director
                                                                                           ASA, Bangladesh

ASA’s simple, standardized and decentralized microfinance model is widely recognized as
one of the most effective in reaching a large number of poor clients. ASA takes a hand-on
approach to Capacity Building, and does not focus on theoretical training. ASA’s approach
allows it to reduce cost and expand quickly to reach large numbers. There are two
components to ASA’s Management Capacity Building Strategy: 1) ensuring that a sound
operational structure is in place, and 2) providing the opportunity for staff development. This
presentation will focus on describing these unique features of ASA.

Background: Understanding the cultural context

ASA’s concept and understanding of capacity building and practice originate from the
cultural context of third world people. Most productive skills such as mechanics, drivers, and
electricians are transferred hereditarily or through “each one teaches one” methods, where
one senior skilled person trains an unskilled person directly in the workplace. The new
worker observes the experienced worker, acting as an apprentice and gradually taking on new

Capacity building in this case is a continuous process, based on “learning-by-doing”
methodology. This same approach can be applied to microfinance operation with little

Creating a sound ope rational foundation

In order to reach a large number of clients cost-effectively and rapidly, we need to make sure
that a proper foundation is in place. Staff must be enabled to do their jobs effectively,
efficiently and rapidly. This can only be accomplished when operational procedures, staff
responsibilities, and allowable expenses are clearly understood.

ASA’s microfinance delivery model is simple, standardized, transparent, decentralized, and
completely manual. Documentation is effective and comprehensive, with extensive written
manuals and communiqués available to staff. Procedures are designed to facilitate decision-
making and communication. ASA’s sound operational structure provides the foundation on
which management capacity is built.

Key Structural Features of ASA’s Operating Methodology:

1. Comprehensive writte n ope rational manual
ASA’s detailed Manual simply and clearly outline operational procedures. All of ASA’s
activities are outlined in this manual, which covers every aspect of the objectives, policies,
administration and programs of the organization. The manual works as a guide for staff of all
levels. Uniformity of staff activities is maintained, and high operational standards are
ensured. Responsibilities are clearly outlined, and staff can perform any activity by following
the instructions of the Manual. Access to this resource gives staff the confidence to make

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rapid and effective decisions independently of Head Office staff. The ASA Manual enables
the organization to effectively delegate responsibility.

2. Circulars
Detailed circulars are designed to inform staff of changes and new products and procedures.
Once a week staff meet to discuss the Manual and circulars and their implications in their
daily activities.

3. Simple and easy bookkeeping, account keeping and cash book maintenance
ASA has devised a simply, standardized, and completely manual bookkeeping and reporting
system. Field-level staff members can easily complete cash handling and record-keeping
without comprehensive technical training. As accounting, bookkeeping and reporting are
highly standardized, fewer errors are made and mistakes are easily found. Branch Managers
collect information, fill out prescribed reporting forms, and send them to the higher authority.
This simple system allows ASA to manage information with a minimum of technology.

4. Clear written guidelines for area selection and borrowe r’s selection
ASA’s written guidelines for area and borrower selection are clear and concise, allowing it to
expand programs quickly. The guidelines outline all stages of the process from geographical
location, office rental, staff posting, and assessment for identifying borrowers. The entire
process does not take more than a week.

5. Residential Office
All of ASA’s Loan Officers and Branch Managers stay in residential offices. This gives them
the opportunity to discuss day-to-day problems encountered and their possible solutions.
This approach contrasts with the conventional model in which staff live outside of the office,
giving them little time to acquire knowledge and skill. ASA’s model can be compared to an
army cantonment or barracks where all enlistees spend 24 hours a day with fellow
colleagues and significant amounts of time with senior officers.

6. Small branch operation to keep manage ment level at minimum
The Branch is the centre of all field-level activities. A typical ASA office has three rooms: one
used as an office, and the other two used for staff accommodation. Each Branch employs a
peon-cum-cook, but no security guard. The Branch functions with minimum management
capacity and low cost.

7. Standardized furniture and fixtures
All furnishings and fixtures in ASA’s offices and branches are standard. All allowable
expenditures are clearly defined, and ASA has set a cost ceiling for all kinds of expenditures.
This standardization means that less time and effort is required for decision-making and
calculation. Misappropriation, and wastage of time and resources are virtually absent from

8. Strong physical monitoring- not based on documents only
ASA’s Senior Officials based at its Head Office must pay visits to the field for program
monitoring at least three times a month. Monitoring checklists have been formulated based
on field-level realities. This monitoring is used as the basis for rapid changes to the policies,
rules and regulations of the organization. ASA’s hands-on monitoring system helps
management to take appropriate decisions and implement programs effectively. No
organization with conventional management has introduced a similar monitoring system.

9. Decentralized operations at appropriate level
Decentralization is a bold initiative of ASA management. The majority of authority to make
day-to-day decisions is vested in field-level management. Active participation of all staff

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members has been ensured through this delegation of appropriate authority. Decisions are
made quickly, funds are utilized efficiently, financial plans are chalked out properly and
operations are conducted effectively.

Human Resource Development

ASA’s sound foundation creates an environment that enables human resource development.

Key features of ASA’s Human Resource Development Strategy:

1. Mentoring
Central office staff and District Chiefs provide one-on-one mentoring during field visits.
Knowledge and skills are transferred by demonstrating effective supervision, observation
and decision making processes.

2. Inte rnal promotion
ASA believes that internal promotion is both an effective means of motivating staff and an
efficient way of ensuring smooth operations. Promoting knowledgeable and experienced
staff reducing training costs. Because they are aware of the opportunity to advance, Loan
Officers start observing the job of their Branch Managers.

3. Group interview for recruitment
ASA does not follow the traditional system of written examination or individual interview for
recruiting new staff, instead using a group-based recruitment method. 2 senior staff
members together interview 15 to 25 candidates, and competent candidates are selected.
Using this method, a large number of staff can be employed very rapidly and with less cost.

4. Practical on-the-job training
ASA does not provide long duration training courses for newly appointed field staff. After
appointment, new employees are assigned an experience and skilled staff member as a
mentor, and undergo on-the-job training. New employees acquire knowledge and develop
through a “learning-by-doing” process. This system is different from the conventional training
system followed by other organizations, which provide long training courses from newly
recruited staff. ASA’s focus is not on the theoretical, but rather the practical. This emphasis
makes ASA’s training system both cost and time effective. The system is in keeping with
ASA’s simply designed operational, record-keeping and accounting systems.

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