Microfinance: accountability from the grassroots

Abstract

Purpose -The purpose of this research is to use an accountability framework to explain the emerging tensions in accountability and how an intended bottom-up approach became progressively supplanted. This paper is set within an emerging Zambian microfinance organisation moving into crisis. Design/methodology/approach -A series of semi-structured interviews were conducted with key local microfinance specialists, managers and accountants, clients and past and current loan officers. Live observation of the client-loan officer interface and internal meetings provided triangulation on accountability relationships in the midst of crisis. Data were analysed using NVIVO, a qualitative computer software package. Findings -The findings show that tensions between vertical and horizontal accountability in practice can be directly translated into heightened pressure and stresses on both the non-governmental organisation (NGO) and its loan officers, which constrain overall accountabilities to other stakeholders and disguise other potential dysfunctions.Research limitations/implications -This study focussed on accountability at the grassroots in microfinance NGOs with a social mission. It reveals potential for further personal, community and socially constituted accounting research within microfinance in particular. Originality/value -The paper adds to the literature on NGO accountability. It will be of value to researchers and practitioners seeking to gain a better understanding of not-for-profit organisations whose goals are not primarily wealth creation. It also gives details on under-researched areas in accounting, namely NGOs and poverty reduction, and practices in Sub-Saharan Africa.

Globalisation, accounting and developing countries

“…However, actual accountability and 'textbook' notions of downward accountability proclaimed by NGO chiefs can diverge: it can be tokenistic and not lead to changes in core development ideals and attitudes (O'Dwyer & Unerman, 2010). Moreover, its formalisation may corrupt well-meaning intentions of those demanding downward accountability, leading to ambiguity and misplaced priorities amongst NGOs' staff (Dixon et al, 2006). Given that clients are often illiterate, and are not habituated to participation or exercising their human rights, this often requires verbal and imaginative means of downward accountability, otherwise it may merely serve to legitimate the process of downward accountability (Goddard & Assad, 2006).…”

“…For example, three Tanzanian NGOs with formal, structured and adequately staffed systems were not perceived as more accountable (Goddard & Assad, 2006, p.397); and, when a microfinance NGO in Zambia undergoing crisis and fraud improved its upward accountability, it detracted from the vital reliance upon and trust needed amongst borrowing groups and loan officers (Dixon et al, 2006). However, NGOs are not immune from corruption, mismanagement, mission drift, and capture by powerful interest groups and funders; and NGO legislation and regulation is inadequate in many DCs, hence the need for upward accountability.…”

Studi Fenomenologi Akuntabilitas Non Governmental Organization

“…Informasi on-line yang disajikan NGO mengenai kebijakan dan pengambilan keputusan kebanyakan tidak transparan dan tidak semua NGO menerbitkan laporan tahunan. Dixon et al (2006) meneliti akuntabilitas penyaluran dana bergulir oleh organisasi CETZAM 5 untuk memberdayakan kaum miskin di Zambia. Awal kegiatannya organisasi sukses menyalurkan dana sesuai standar yang ditentukan donatur.…”

From shouting to counting: civil society and good governance reform in Cambodia

“…Donors sought to make NGOs more 'accountable' as a fundamental criterion within funding initiatives, through the infusing of new public management strategies directly into their frameworks to create a 'professional' form of NGO that could implement donor projects more smoothly (Dichter 1999;Silliman 1999). Accountability within this context has been narrowly interpreted to link closely with new public management through accountancy, evaluation and audit procedures in an attempt to ensure NGOs are responsible for the funds that are channelled through them (Frumkin and Andre-Clark 2000;Dixon et al 2006). As a consequence a culture of audit appears, where NGO's actively attempt to appear 'fundable' to their donors, often instilling projects that can be quantitatively measured, monitored and evaluated in order to have the best chances of demonstrating success (Guthman 2008).…”