Pressure on Loan Officers in Microfinance Institutions: An Ethical Perspective

Abstract

Loan officers play diverse and significant role in Microfinance Institutions (MFIs). While performing their job, they encounter tremendous pressure. Some of the pressures are meeting deadlines and quotas, powerful hierarchical pressure, reducing Portfolio at Risk (PAR), working more than normal functioning hours in and outside office, structural pressure. These types of pressure reduce productivity, creates dissatisfaction with jobs, lower confidence, hamper relationship, and most importantly, impact personal life. This unrealistic pressure on loan officers is an ethical issue. In this paper, some management consequences will be discussed that arises from the unethical pressures. Besides that, some practical recommendation for the managers of microfinance institutions are suggested to address this issue such as proper implementation of human resource policy and procedures, appropriate planning and promote supportive culture, effective communication and feedback, adequate staff training and mentoring, following bottom-up approach, logistics support.

Keywords: Loan Officers/Credit officers, Pressure, Microfinance, Ethics

DOI: 10.7176/JESD/4-12-84