Addressing the Microfinance Skills Gap in Kenya

Today, the term Inclusive Finance is common in the development space. As indicated in the Blue Book (UNCDF, May 2006), Inclusive Finance is characterized by the accessibility of all households and enterprises to a range of ‘bankable’ financial services, institutional sustainability in providing access to financial services over time and improved customer access to multiple financial service providers who have the skills to create a wide range of product alternatives to suit their needs.

The latter forms the basis of Swisscontact’s Inclusive Finance Programme (IFP) intervention of Developing Skills for the Financial Industry.

The financial service sector has in the recent past experienced notable changes as a result of technology. One of these is the adaptation and growth of fintech companies which use technology to offer credit to people through mobile money transfers. This has significantly disrupted the Kenyan financial landscape with a section of the population willing to actively hold mobile money accounts rather than conventional bank accounts. This, in turn, limits the amount of credit they can access. There is also cutthroat competition among financial institutions who seek to tap into the unbanked market by offering various products that speak to their needs.

We carried out baseline research that indicated a skills gap within the microfinance sector. Microfinance institutions were not able to compete and retain large customer numbers because their staff lacked certain skills or were mismatched in their job roles,’ commented Mr. Wilfred Mututa, the Inclusive Finance Programme Project Coordinator in charge of the intervention. 

‘Keeping in mind the overall programme objective of empowering entrepreneurial people at the bottom of the pyramid by improving their access to financial products and services, we saw it fit to address this gap through the design of a market-oriented microfinance course. We expect that the new age financial practitioners who undertake this course will be fit enough to handle the ever-changing demands and trends taking over the financial industry today and will meet the needs of the unserved market. Success within the financial industry greatly depends on the availability and use of qualified workforce.’

The Bachelor of Commerce (B.Com.) is a common degree course offered in many Kenyan universities while the Bachelor of Co-operative Business (BCOB) is only offered at The Co-operative University. However, none offer specialisation units in microfinance. The course design will give students a chance to specialise in microfinance skills (as a major) through enrolling for 13 specialisation units spread across their 3rd and 4th years of study. In the end, graduands will attain a degree in Bachelor of Commerce or Bachelor of Co-operative Business – Microfinance Option. The improvement of skills within the workforce will lead to improved service delivery and ultimately an increase in access to financial services by the underserved and unserved populations.

Guaranteed Experience 

In the beginning, the degree course will be implemented on a pilot basis at The Co-operative University of Kenya and the project will seek more partnerships with other institutions over the implementation period. As part of the MoU agreement, students who enrol for the degree course are guaranteed practical work experience with financial institutions through coordinated internship and mentorship opportunities. The degree course will not only target entry-level students but also those who are already employed in financial institutions. 

‘We realise that effective planning of human resource development is key in providing the needed workforce capacity within the sector. The course will be interactive; giving real-life local case studies of present-day challenges affecting the microfinance industry,’ explained Mr. Mututa.

An Inclusive Process 

Addressing the skills gap and creating a market-oriented microfinance course has been a collaborative process involving independent educational institutions and microfinance sector players. The process has faced a lot of red tape which the project intervention has helped address. Through its facilitation, it has been able to get the buy-in from several sector actors who have pooled in their resources to develop a curriculum framework. This framework has been subjected to analysis and critique from several professional players and academicians.

Swisscontact contributed to a plenary discussion on ‘The role of the Education Sector in Entrepreneurship and Development – The Missing Link’ during the National Microfinance Conference held in June 2019. The involvement clearly confirms the important facilitatory role Swisscontact has played in ensuring the skills gap is addressed.

The degree course is set to be launched in August 2019 and student enrolment will begin in September 2019.

A Snippet of the Microfinance Skills Diploma Course

  • In 2010, The Co-operative University of Kenya developed a diploma programme in microfinance. However, the uptake was low with only seven students expressing interest in the course by 2011. This led to the deferment of the programme.
  • In 2012, Swisscontact partnered with The Co-operative University of Kenya to provide technical support in the review and further development of the microfinance course. The programme was later relaunched in 2013.
  • The first group of 16 students graduated in 2015.
  • Since 2015, the university has been producing microfinance diploma graduates each year; with 138 graduates by 2018.
  • As of 2019, the diploma programme has about 426 students in different years of study and others on industrial attachment.