The “Human Aspect” of Commercial Transformation

This paper describes the experiences of the National Rural Support Program (NRSP), Pakistan, in transforming its microfinance operations into a regulated microfinance bank and in implementing a deposit mobilization initiative. MFIs typically transform from NGOs to banks for attaining scale and sustainability. NRSP, Pakistan's largest rural poverty-relief program, transformed its microfinance wing into a public limited banking company. The paper presents lessons learned from the experience on internal management, human resources, investment interests and infrastructure.The paper highlights the need to address human and cultural aspects of transformation. Recommendations include:

• Assign and communicate clear management roles;
• Plan extensively, and base strategic decisions on market research and experiences of other MFIs;
• Focus on open communication with staff at all levels;
• Address individual concerns;
• Orient new staff to organizational culture;
• Involve sub-units in transformation planning;
• Communicate mission and vision of transformation with current and potential investors.