Microfinance defies economic slowdown

Microfinance is one of the few sectors to have escaped the impact of the financial slowdown, according to a new report published this week.

Unitus-Hewitt Microfinance Compensation & Benefits Survey found employee compensation in India-based microfinance institutions (MFIs) has held steady through the recession.

Looking at employee compensation is a considered a reliable measure of how much a sector has been forced to make cuts.

The survey found that through 2009 MFIs continued to grow so there was no need for salary cuts.

“Compensation and benefits practices provide a unique lens through which we can assess the health of the microfinance industry and the motivations of its leadership,” said Sandeep Chaudhary, Hewitt Associates spokesperson.

He added that the success of microfinance through the recession could encourage other financial institutions to consider socially responsible business models.

“Today and in times to come, we believe the insights offered in this report will influence HR strategy, organisational structures, and compensation and benefit design throughout a sector in constant pursuit of a balance between financial stability and social impact,” Chaudhary said.

For the study Unitus-Hewitt surveyed 15 India-based MFI’s, representing over 10 million clients across India.

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