ACKNOWLEDGEMENTS

We are very thankful to my host organization “ICICI Prudential Life Insurance

Company” for giving us the opportunity to work and study there as part of our
Organization Traineeship Segment (OTS) of PRM course. We are grateful to
A.L.Narsimhamurthy, secreatery and chief functionary, “Gram Siri” for providing us with
the opportunity to understand the organization and its functioning. we owe special words
of thanks to my Reporting Officer, Mr. Srinivas Revanur, Assistant sales manager (Rural
business) for helping us during the progress of the work and providing me valuable
insights.
We are also very thankful to the, Mr. A. Hasan; secreatery and chief functionary,SMSS
and other staff of the organization who helped us during our study. We extend our
heartiest thanks to all the personnel of SMSS and Gram Siri who cooperated with us
during the study of the organization.

Finally, we thank my faculty guide, Prof Nirlesh Kothari for offering helpful suggestions
and comments. Prof Nirlesh Kothari has guided us in this project through his invaluable
constructive suggestions without which wecould not have been through this project.

Mukul Kumar Singh (25026)

Shahid Ahmed Khan (25098)

EXECUTIVE SUMMARY

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Title: study of organizational structure of channel partners (two MFIs) of ICICI
PRUDENTIAL LIFE INSURANCE

Organization: ICICI PRUDENTIAL LIFE INSURANCE

Reporting Officer: Mr. Srinivas Revanur

Faculty Guide: Prof. Nirlesh Kothari

Students’ Name: Mukul Kumar Singh (25026); Shahid Ahmed Khan (25098)

Objectives and scope of study: (1) to suggest ways to bring about growth orientation in
the decentralized network of organizations at GRAMA SIRI (GS) (one of the channel
partners) (2) to design scalable organizational structure of STAR MICROFIN SERVICE
SOCIETY (SMSS) (another channel partner), to identify the skill requirements and
corresponding eligibility criteria for key staff positions, to design incentive scheme for
the loan officers (all these for SMSS).

Methodology: for GS, we assessed the past performance of network organizations on the
basis of indicators like loan outstanding, funds received, number of SHGs formed etc.
then we interviewed chief functionaries and key staff members of all the network
organizations to gain an understanding of their own operations and the environment in
which they are working. Combining these two findings, we identified the bottlenecks and
possible solution. For SMSS, we assessed their current level of operations and on this
basis we tried to find out their staff requirement and also how best it can be organized
into an organizational structure which is compatible with the planned growth of
organization. We studied the MIS reports of last six months relating to loan disbursement
and performance of each loan officer. Combining these findings with the strategic
requirements of organization, we identified the performance indicators for loan officers
and on this basis we developed formula for the incentive to loan officers.

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Major findings: GS: it started its microcredit operations in 1984 with a strategy to lend
to a network of organizations for onlending to SHGs. This network of organization had
been created out of clusters of GS with an objective of spreading the developmental
activities to new areas and new people. It is in this context that we conducted our study to
know the extent to which this objective has been achieved. We found that the network has
been only partly successful in attaining this objective with only 30% of target population
in operational area having been benifitted. we identified two major problems in almost all
the network organizations, namely weak governance and flawed growth strategy. Due to
weak governance there was no or weak accountability to performance on the part of
management. It also resulted in absence of well defined strategy at the top. Besides these
two factors, growth of network is also being affected by strategy of converting former
clusters of parent organizations into full fledged organizations. This has resulted into
clutter of organizations in very small operational area with each organization eating into
client base of other organization. To pursue further growth, these organizations are
opening new branches which are far off from head office and thus adding unnecessarily
to already high transaction cost which characterizes micro finance operations. As regards
SMSS, here the existing organizational structure was marked by some redundant
positions at head office and branch office level. At head office there was no clear cut
distinction of roles and responsibilities of key staff positions. Furthermore, SMSS being a
startup organization, it had ‘growth in client base’ as its most important goal. But the loan
officers of the organization were showing stagnant performance on various parameters.
This necessitated the need of linking their compensation to performance through a
performance based incentive scheme.
Recommendations: For GS: improvement in the governance structure and well defined
growth strategy for network organizations which takes into account the external and
internal environment of organizations. For the board we recommended induction of
members with more diverse background, defining the rules governing induction and
retirement of board members, meeting of board and performance appraisal of board
members. For SMSS, we recommended an organizational structure with well defined

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hierarchy and the corresponding roles and responsibilities. We also designed an incentive
scheme which is based on growth performance of loan officers.

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