Are Microfinance Loan Officers Closer to Banking Staff or to Non‐profit Workers? A Motivational Approach

• Published date: 01 March 2017
• Author: Cécile Godfroid
• Date: 01 March 2017
• DOI: http://doi.org/10.1002/jsc.2114

RESEARCH ARTICLE

Strategic Change 26: 117–132 (2017)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2114

Copyright © 2017 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2114

Are Micronance Loan Ofcers Closer to Banking

Staff or to Non‐prot Workers? A Motivational

Approach1

Cécile Godfroid

Université de Mons, HumanOrg and CERMi, Belgium

Even in double‐bottom‐line‐micronance institutions, loan ofcers are not all

prosocially motivated but rather are motivated by working conditions and

promotions, highlighting the complexity of human resource management in hybrid

organizations.

Micronance institutions (MFIs) are hybrid organizations that combine com-

mercial and social objectives (Ashta and Hudon, 2012). ey belong either to the

for‐prot sector, to the non‐prot one, or sometimes to both. If for‐prot com-

panies tend to attract ambitious employees looking for high salaries, non‐prot

workers are, in comparison, more people‐oriented and prosocially motivated.

MFIs are therefore of high value to explore workers’ motivations. e aim of this

article is to determine whether the micronance sector should be analyzed using

a classic motivational approach or a non‐prot‐based one.

We focus exclusively on loan ocers, whose activity is close to that of bankers

but with a more social reasoning. ese employees may be aected by an MFI’s

paradoxical logic (Battilana and Dorado, 2010), inducing a challenging organiza-

tional identication and role conicts when playing the double role of debt col-

lector and counselor.

Regarding loan ocers’ motivations, Siwale (2006) noted that only 47% of

loan ocers working in a non‐governmental organization (NGO) in Zambia were

motivated by interest in working with the poor. Gray et al. (2013) concluded that

the primary reported motivation driver is the wish to help the community. Paying

heed to these calls, this research aims to add to this debate.

For this purpose, we conducted 30 semi‐directed interviews at the Senegalese

MFI Pamecas. is enabled us to build a framework highlighting the links between

the dierent motivational factors, and to establish a typology. Our results show

that analyzing the micronance sector by only taking classic motivation theories

into account is not sucient. Particularly, motivational theories from the

1 JEL classication codes: G21, L3, M5, O15.

In hybrid organizations such as

micronance institutions,

prosocial and self‐interested

motivations are independent and

not mutually exclusive.

Loan ofcers working in double‐

bottom‐line micronance

institutions can be divided into

four categories: materialists,

careerists, bare minimum

employees, and enthusiasts.

Human resource management in

the micronance sector should be

analyzed by adopting the

contextual paradigm rather than

the universalist one.

118 Cécile Godfroid

Copyright © 2017 John Wiley & Sons, Ltd. Strategic Change

DOI: 10.1002/jsc

developing world and from the non‐prot sector should

be added.

is article contributes to the micronance literature

as it studies loan ocers’ management, a topic that is still

poorly documented. Moreover, it adds to the literature on

hybrid organizations as it highlights the real complexity

of human resource management in social enterprises, and

shows that in these organizations, prosocial and self‐

interested motivations are not mutually exclusive. Further-

more, it contributes to the debate in human resource

management as it highlights the importance of adopting

the contextual paradigm rather than the universalist one.

Finally, this article has practical implications for managers

of MFIs as it may help them develop motivational mecha-

nisms to address a major issue: the problem of interest

alignment between an institution and its loan ocers.

Literature review

Micronance loan ocers may be viewed as bankers with

a more social approach. Like bankers, they represent the

link between the client and the institution (Canales and

Greenberg, 2013; Chua, 1998) and have to encourage the

participation of potential clients, decrease the risk of

default, deliver a high‐quality service (Fisher and Sriram,

2002), and study loan applications (Holtmann and Gram-

mling, 2005). However, some features distinguish the job

of micronance loan ocers from that of traditional

bankers. First, micronance loan ocers deliver nancial

services to the poor (Isaia, 2005). Second, the decentral-

ization of credit procedures in micronance gives credit

ocers considerable discretion, increasing asymmetric

information and agency problems (Agier and Szafarz,

2013). ird, compared to traditional bankers, they have

to act simultaneously as personal counselors (Siwale and

Ritchie, 2012) and debt collectors (Ito, 2003), leading

them to experience role conicts. is may explain why

a large number of MFIs seem to have diculty attracting

and retaining credit ocers who desire to contribute to

the double mission of the organization.

As micronance belongs to both the non‐prot and

for‐prot sectors, loan ocers’ motivations can be ana-

lyzed using either a classic motivational approach or a

non‐prot‐based one.

Motivations in the non‐prot sector

Employees in the for‐prot and non‐prot sectors evolve

in dierent working environments (Schepers et al., 2005)

and may therefore develop diverse motivations. e for‐

prot sector attracts less people‐oriented workers than

non‐prot organizations (Rawls et al., 1975). De Cooman

et al. (2011) showed that not‐for‐prot workers are less

motivated by extrinsic factors and they value social service

more than their for‐prot counterparts. Satisfaction seems

to be more present among workers in the non‐prot sector

because of their engagement in social causes (Benz, 2005;

Besley and Ghatak, 2005). Nickson et al. (2008) showed

in their study that the majority of interviewed employees

working in the voluntary sector took this job for reasons

other than the salary. Workers in non‐prot organizations

are driven rather by prosocial motivation (Rawls et al.,

1975), dened as the desire to make eorts to benet

others (Batson, 1987). Whether prosocial and self‐inter-

ested motivations are independent has led to a debate in

the literature. According to Meglino and Korsgaard

(2004), both are mutually exclusive. However, other

scholars argue that they are independent. Indeed, organi-

zational citizenship behavior can be motivated by the

desire to help others, but also by the wish to be favorably

perceived by others (Bolino, 1999). Grant and Berry

(2011: 77) explained that prosocial motivation referred to

‘a concern for others, not a concern for others at the expense

of self‐interest.’ Empirical evidence is still necessary to add

to this debate. Tonin and Vlassopoulos (2009) also con-

sidered that prosocial and self‐interested motivations are

not negatively linked by disentangling the sources of pro-

social motivation into two types: action‐oriented altruism,

also known as impure altruism (Andreoni, 1989) and

output‐oriented altruism, or pure altruism. Pure altruism

is dened as ‘giving without regard to reward or the benets