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This paper examines the difficulties faced by microfinance loan officers in their daily work and highlights that these difficulties may be grouped into six categories: variable remuneration; fieldwork; trade-off between the social mission and financial objectives; leadership problems; exhausting work both morally and physically and microfinance organization (MFO) not showing enough consideration for its employees.

This paper analyses the root causes of employee turnover in social enterprises by examining a well-known microfinance organization that was created in 2008 as a non-bank financial institution and which is active in a Latin American country. Its mission is to “accompany with adequate and responsible financial services the development of entrepreneurial families, mainly from the rural sector”. Among its clients, 65% are rural and half are women. This major MFO is experiencing high growth (57.8% in 2016) and had 63 branches across the country in 2016. At the time of data collection (in 2016), it employed more than 1,100 staff members, including approximately 600 loan officers (55% of them being women), had a loan portfolio of more than 85 million USD and served approximately 105,000 active borrowers.

One can be highly tempted to say that microfinance institutions and other social enterprises should dedicate the same attention to their employees as to their clients by deploying ethical and socially responsible human resource management (HRM) practices, but it is not that simple. Implementing socially responsible HRM practices may be particularly costly, though some practices may be less expensive than others. Moreover, as most microfinance institutions operate in developing countries, the resources or infrastructure needed to implement some of these practices may be limited, and corporate social responsibility is less formalized or institutionalized in such countries than in developed ones (Visser, 2008). Moreover, one may also argue that the financial resources required to implement such practices could instead be dedicated to the development of better services for clients or to practices favouring a better respect of those clients. The implementation of socially responsible HRM practices may thus, in some cases, limit the pursuit of MFOs’ social mission, even if some authors argue that, on the contrary, implementing ethical HRM practices contributes to the development of corporate social responsibility (CSR) for external stakeholders. It should also be noted that the funders of MFOs may not make the implementation of such practices a priority and can even be against it. Therefore, as mentioned by Foote (2001, p. 35) in his study on charities, “a difficult balance must be achieved between the ethical interests of charity sector employees and the demands of the bottom line in a market of increasing competition for donations”.

Based on our study, one can be highly tempted to say that microfinance institutions and other social enterprises should dedicate the same attention to their employees as to their clients by deploying ethical and socially responsible HRM practices, but it is not that simple. Implementing socially responsible HRM practices may be particularly costly, though some practices may be less expensive than others. Moreover, as most microfinance institutions operate in developing countries, the resources or infrastructures needed to implement some of these practices may be limited, and corporate social responsibility is less formalized or institutionalized in such countries than in developed ones (Visser, 2008). Moreover, one may also argue that the financial resources required to implement such practices could instead be dedicated to the development of better services for clients or to practices favouring a better respect of those clients. The implementation of socially responsible HRM practices may thus, in some cases, limit the pursuit of MFOs’ social mission, even if some authors argue that, on the contrary, implementing ethical HRM practices contributes to the development of CSR for external stakeholders. It should also be noted that the funders of MFOs may not make the implementation of such practices a priority and can even be against it.

Our study contributes to the literature on ethics and HRM since it discusses the pertinence of implementing ethical and socially responsible HRM in non-conventional organizations. It also contributes to the literature on microfinance and social enterprises by offering a comprehensive overview of the difficulties faced by employees of such organizations.