Sponsored by the Citigroup Foundation

 

 

Rural Development Institute,

Chinese Academy of Social Sciences

China Microfinance Training Center

 

 

 

5-year Project Plan

 

 

 

 

September 2004

 

 

 

 

 

5 Jianguo Mennei Street, Room 1341, 13/F Building of Chinese Academy of Social Sciences

Beijing 100732

Tel: 85196472 / 85196474, Fax: 85196474

Email: ccmtc@cass.org.cn

 

 

Table of Contents

 

              I.           Background

            II.           Organizational Structure

          III.           Mission

          IV.           Training Contents

            V.           Trainees and Methods

          VI.           Training Expenses

        VII.           Trainers

      VIII.           Training Materials

          IX.           5-year Training Outline

            X.           Annual Training Plan

          XI.           Training Application

        XII.           Application Form & Requirements

I.     Background

 

The successful practice of microfinance in poverty alleviation in China has made microfinance popular among low-income farmers, and it has also received broad interest and support from all walks of life. However, not many staff in microfinance institutions, especially non-governmental or quasi-governmental microfinance institutions, has a financial background or training in credit and risk management, or financial management. This is why non-governmental microfinance institutions tend to run better when they are in smaller in scale; however, the loan quality often weakens as they expand. Poor business management processes, systems and skills have become a major barrier to the future development of the microfinance sector in China. Therefore, the Chinese Academy of Social Sciences’ Rural Development Institute has cooperated with Citigroup to establish a microfinance training center that will train the management and business staff of microfinance institutions in a planned and structured way. This is expected to make a significant contribution to the improvement of their business management skills. The cooperation will last for 5 years. The program will be funded by the Citigroup Foundation and organized by the Chinese Academy of Social Sciences’ Rural Development Institute.

 

In the past, with funding from the World Bank (CGAP) and the Ford Foundation, the Chinese Academy of Social Sciences’ Rural Development Institute established a smaller microfinance center. Its main mission was to develop microfinance training while introducing international microfinance experience to China. After making some good progress, this center is now transferring part of its fixed assets (office facilities) and balance sheet (case studies of microfinance development in China) to the newly-established training center. Therefore, the microfinance training center also has the support and funding of the World Bank (CGAP) and the Ford Foundation.

 

II.    Organizational Structure

 

The training center’s organizational structure consists of the advisory council and the management/staff.

 

1.    Board Members

The training center’s advisory council is currently composed of representatives from the Rural Development Institute, Citigroup, Ford Foundation (proposed) and CGAP, World Bank (proposed).

Roles and responsibilities of the council members:

·         Review and approve the training plan;

·         Review and approve the annual progress report and financial statements;

·         Decide the major events/activities of the training center;

·         Coordinate between Citigroup and the Rural Development Institute.

2.    Training Center:

Roles and responsibilities of the training center’s management/staff include:

·         Formulate and execute the training plan;

·         Manage and use the training capital;

·         Carry out other activities related to training;

·         Be responsible for annual progress report and financial statements.

This group will be composed of 5-6 people including a director, deputy directors and training secretaries.

Director: Liu Wenpu

Deputy directors: Zhang Baomin, Zhang Hong

Training secretaries: 2-3 people (also acting as the accountant and cashier). 

 

The microfinance training center plans to seek feedback and suggestions from relevant institutes and professionals that deal with microfinance poverty relief, and ask them to assist and support the activities of the training center.

 

III.   Mission

 

1.       Carry out tasks under the guidance of the advisory council

2.       Seek feedback and suggestions from all relevant associations

3.       Improve financial and work policies

4.       Formulate 5-year training outline

5.       Formulate the annual training plan

6.       Draft, print and circulate training center brochures

7.       Draft and print training application forms and send them to relevant institutions

8.       Evaluate and track the applicants

9.       Draft and print the training center newsletter

10.   Draft the training summary, progress report and budget.

 

IV.   Training Contents

 

Eight training courses are planned:

1. Leadership management skills

2. Loan quality and debt management

3. Internal controls: credit risk and fraud prevention

4. Credit promotion: product design, product development and operation monitoring

5. Financial management: financial reporting and analysis

6. Establishment and management of information systems

7. Auditing

8. Microfinance ABC.

The above courses basically cover all aspects of the operation and management of microfinance. The training center will arrange courses according to the preparation of training materials and the demand. The overall goal is to help microfinance institutions establish structured, viable and effective management systems and information systems as a result of the training, and to dramatically improve the business management skills of their staff.

 

V.    Trainees and Methods

 

1.  Trainees. The trainees mainly fall into the following four categories: senior management staff at and above the county-level; management staff of county-level operating institutions; practitioners of different levels of institutions; basic-level credit business staff. Different training classes will be organized according to demand, i.e. management staff training classes, auditing staff training classes, computer information system training classes, credit staff training classes, etc.  Independent institutions, especially those with sustainable development potential, will be given priority. Staff of institutions with normal microfinance operations will also participate in the training.

 

2.   Training methods. The main training mode is short-term training sessions. However, the classes will adopt the interactive method to involve the participation of both trainers and trainees instead of a spoon-feeding approach. The training center plans to organize 10 training sessions every year, each of which will last 3 days and has 25-30 trainees. It is initially planned to organize 4 classes in Beijing every year and 6 classes in other areas. Training dates, places, number of trainees and name lists will be announced in the annual training plan every year.

 

3.   Trainees will be examined and trainers will be evaluated in the training.

 

VI.  Training Expenses

 

According to the five-year agreement between the Chinese Academy of Social Sciences’ Research Development Institute and Citigroup, free training will be offered in the first three years, and partially subsidized training will be offered in the last two years.

 

3-year free training:

·         The training center will not charge trainees or trainees’ units any fees, and will not charge enrollment fees, tuition, trainers’ or training materials’ fees.

·         Return tickets of trainees to training classes will be reimbursed. In most cases, only long distance bus fares and hard sleeper train tickets will be reimbursed. Trainees will be informed in advance of any costs that they need to absorb.

·         Board and accommodation costs of trainees during the training sessions will be borne by the training center.

·         Training classes will provide training materials and “training communications” for trainees free of charge.

·         To allow for the difficulty of trainees traveling from remote areas, the training center will provide proper transportation subsidies that will be specified in the training plan.

 

2-year partially subsidized training:

·         For training in the fourth year, the return transportation of trainees will be born by the units, while the other items will remain free of charge.

·         For training in the fifth year, the return transportation of trainees to training classes as well as board and accommodation costs will be born by the units, while the other items will remain free.

 

VII.  Trainers

 

The training center plans to employ domestic and foreign microfinance experts as trainers.

 

1.  Since microfinance has been practiced for much longer in some foreign countries than in China, foreign experts have rich experience and theoretical studies. Their training methods are also innovative. Therefore, it is planned to employ foreign experts to teach part of the courses. Foreign trainers will train Chinese trainers and senior management staff of microfinance institutes. The training center plans to employ 4 foreign trainers every year.

 

2.       Chinese trainers will be the main force. The training center plans to employ experts with both practical experience and theoretical studies as trainers. It will strive to set up a training team that can cultivate talent within the microfinance sector.

 

3.  Trainers are requested to provide training materials that can be distributed to trainees in each training class.

 

VIII. Training Materials

 

The foreign experts will be asked to compile their training materials according to certain requirements.

 

The Chinese experts will be asked to compile their training materials according to the training outline. Training materials must be compiled according to the following three principles:

1.         Existing foreign training materials will be referenced.

2.         Training materials will be based on the actual situation in China, will focus on practical, effective and adequate principles, and will be reinforced with Chinese case studies.

3.         Training materials will be developed according to the interactive training method. Roleplays and games will be written into the training materials, as well as facilitated discussions and question and answer sessions. Trainers should provide training materials that can be distributed to trainees in each training class.

 

The training center plans to develop a series of structured training materials that will serve microfinance institutions in China over the next 2-3 years.

 

IX.   5-year Training Outline

 

The 5-year plan is a directive outline. Its main goals are to define the overall objectives and work tasks in 5 years to guide the execution of the annual plans. Specifically, there are three key goals:

1.         Train 1,200-1,500 people in five years. Since some people need to attend several training sessions, the actual number of trainees reached within five years will be 800-1,000.

2.         Develop a set of systematic training materials and a stable of trainers within five years.

3.         Develop microfinance training methods suitable for China within five years.

 

X.    Annual Training Plan

 

The annual training plan will be based on the funding year. The first year is from August 2004 to July 2005. The second year is from August 2005 to July 2006. Therefore, the five-year program will be completed in July 2009.

 

1. Training delivery. Managers and accountants will be trained in the first year, and other people will be trained in the following years. 10 training classes will be organized each year -- 4 times in Beijing and 6 times in other locations. The first training in the first year will be organized in October 2004 in Beijing. The training plan will list training times (months and dates), number of days, training content, locations, trainers and name list of trainees as well as training-related contents in detail. This will be sent to relevant units or to microfinance institutions directly (see Table 1 and Table 2).

 

2. Newsletter. The training center’s newsletter will be a bulletin of microfinance training information. It will be issued periodically. Its goal is to publish training information, introduce training references, exchange ideas among trainees and introduce domestic and foreign microfinance trends. It is expected that four issues will be published every year.

 

XI.   Training Application

 

Training will only take place if conducted by the training center, if agreed to by the trainee’s institution, and if the trainee participates on a voluntary basis. Institutions that want to attend the training should fill in the training application form indicating their intentions. The training center should arrange the training according to its capability and the operational needs of the microfinance institutions. Although it would like to train every staff, it will be difficult to meet the training demands of all staff in five years due to its limited scope and capacity.

 

XII. Application Form and Requirements

 

For the format of training applications and the working staff lists, please refer to Table 3A and Table 3B. We will print and send these application forms to relevant institutions.

Form requirements:

1.       Complete the form carefully

2.       Filling out the form indicates that you will accept the training and abide by the relevant training regulations of the training center

3.       Trainees should attend all classes, and should not distract themselves with other activities beyond the training class; otherwise, this may affect future training opportunities for the institutions involved

4.       After the training class is confirmed, there be will no extra charges except for special events

5.       After the training form is completed, it should be sent to the office of the training center

6.       If institutions make cancellations or send more/less staff, they must inform the training center in a timely manner so they can make adjustments to the training plan.

Table 1   Training Plan for 2004-2005 (sample) 

                               (Please refer to Table 2 for the list of trainees)

Course No.	Time	Training content	Number of trainees	Trainers	Class hours	Target participants	Site
1
2
3
4
5
6
7
8
9
10

 

Table 2    List of Class          of 2004-2005 (sample)

Training content:                                

Address:

Date:

Number of trainees:

Trainer:

List of trainees:

Name	Gender	Location (province, city and county)	Name of institution	Title	Contact

 

Table 3A   Training Application Form (for units of county level institutions)

                                                 date of completion:     2004

Full name of institution applicant
Address of institution
Contact person			Tel, mobile
			Email, Zip code
Supervisory body
Establishment of institution
Branches with independent account settlement capability
Number of existing staff
loan amount
loan source (donation and  loan separated)
loan interest rate
loan period
Amortized loan cycle
Year-end loan return rate
Have anticipation of sustainable development or not
Computer booking or not		Booking software and financial settlement method
Computer brand and number of computers
Training requirements
Remarks

 

* List of working staff will be filled in the form of Table 3B