As my fellowship nears its end, I’ve purposely taken time to step back and revisit my original reasons for deciding to quit my job, stuff my apartment into a dusty storage unit, leave family and friends and fly to Ghana. One of my goals was to see the impact of commercialization on an MFI’s social mission.
Recently, Sinapi has confronted this issue head-on when it started the process of converting from an NGO to a formal financial institution. Like many MFIs before it, Sinapi wanted to change its business structure in order to receive more commercial financing as well as to take client deposits. Many of the expected benefits were cited for this decision including new financial discipline in the organization and the potential to open new markets and reach more borrowers. Likewise, I heard many of the expected negatives including the burden of debt-servicing and the pressure by commercial lenders to alter or downscale the social mission of the organization. But, it was the impact this organizational change had on the lender / borrower relationship that I never really considered. Or as I like to call it – the impact on the organization’s mission to be social. In Sinapi’s case, the mission to be social was a key driver in its decision to slow its transformation process.
During the weeks I’ve spent out in the field, the one thing that continually strikes me is how the loan officers and the clients are more family than business partners. There are, of course, the smiles that will last a lifetime for me. But, there are also warm hugs between loan officers and clients – when’s the last time you’ve hugged your banker? There are the handshakes that last minutes not seconds. There are clients who attribute their recent success to joining the Sinapi family. There are the times after group meetings when we would pack into Sinapi’s Toyota van and take the clients back to their home – inevitably I’d find myself in the center of a group of giggling middle-aged women laughing at my attempts to communicate in Twi. And back at the branch there is the open arrangement of the office. There are no tellers. No walls between the officers and clients. Instead, clients walk into the office – some with their business on their heads – and are welcomed to the officer’s desk.
But, as Sinapi’s formalization plan was initiated and branches were converted into a more traditional banking layout, the relationship with clients evolved. Clients became more hesitant to approach the officers. They felt that they couldn’t come to the branch in their work clothes. They were intimidated by teller windows. The Sinapi family was gone. Warm hugs were replaced by the cold creditor-debtor relationship we are all know too well. So, the aggressive formalization plans were halted and the family atmosphere I’ve witnessed here returned to the benefit of everyone involved.
Yet, I know the pressure to become more formal will not disappear anytime soon. The supply of microfinance services needs to scale to meet the demand. It will be up to successful organizations like Sinapi to find ways to meet this challenge but keep the Sinapi family intact.