China’s economic growth rate has recently dropped to the lowest point in 25 years. As a result, the microfinance industry in China has faced unprecedented challenges in institutional growth and management, which many practitioners call the industry’s winter. The slowdown has affected the businesses of microfinance clients. In turn, demand for loans has drastically decreased and client over-indebtedness has skyrocketed.
Indeed, according to the head of China Microcredit Company Association, Mr. Luhao Min, “One-third of China’s microcredit companies (MCC) died in the past couple of years, one-third is struggling on the verge of bankruptcy, and only one-third performs well.”
To boost this weakened industry, Accion created the International Microfinance Management and Leadership Program (MMLP). One of several Accion programs in China, we recently hosted the second MMLP seminar April 7 – 9 in Shanghai, China’s financial hub.
Chinese facilitator Ms. Wenfang Chen with Human Capital Management Track participants
Launched in December 2015 with the support from the MetLife Foundation, the MMLP is a new Accion management and leadership program that fills in a gap in China’s microfinance industry. As the first holistic and systematic microfinance management capacity building initiative in the market, the MMLP aims to develop microfinance senior managers’ capacity to cope with day-to-day business challenges.
MMLP participants use drawings to describe institutional culture.
Several participants described the program as a light shining through the darkness, leading them to see a brighter future. “In my company, there have been internal debates on the strategic direction. We are not confident in ourselves and we are not clear about the future. Accion’s mission really touched us and the cases used in class inspired us,” shared one participant. The sessions provide participants with practical insights and tools, and, in a departure from the traditional Chinese approach to training, are highly interactive, employing a variety of training methods.
The April seminar was the second of three seminars taking place over the course of the nine-month program. This time, we had 31 participants representing 13 top-performing Chinese microfinance institutions (MFIs) located all over China, including An’hui, Beijing, Chongqing, Ningxia and Inner Mongolia.
Participants and facilitators during the second MMLP seminar.
This second seminar marks the midpoint for the MMLP. Our team here at Accion will continue in our work creating and carrying out a program to build the capacity of managers from top-performing MFIs, and strengthen local practitioners’ faith toward the microfinance industry in China as a whole. By stepping into the market at a time when the industry looks dormant, the MMLP is seizing a great opportunity to contribute to efforts to revitalize microfinance in China. The program strives to improve the confidence of those leading MFIs and inspire them to take the lead in addressing key business challenges and create more innovations in the field that will benefit microfinance clients in China for many more seasons to come.
Amy An co-authored this post.