Innovation in microfinance technology is reshaping performance metrics, with recent findings revealing that many institutions in Gulu District are leveraging Balanced Scorecard principles. However, this study uncovers critical gaps in learning and growth perspectives that could hinder service delivery, prompting a reevaluation of current practices.
5.2.4 – Period for the customers with the MFIs
The findings on the period the customers had been with the MFIs, as presented in Figure 8, indicated that the highest percentage of the customers who had been with the MFIs for periods from 1 to 2 years was 39.6%.
Then those who had been with the MFIs for a period less than 1 year was 34.0%, and the remaining small percentage of 26.4% had been with the MFIs for more than 2 years.
These results explain the fact that most of the MFIs, where the research was conducted, were recently established and therefore, the customers had not been with them for long.
However, a few of them had been in existence for more than two years, though operating under a low profile. The periods the customers had been with the MFIs, are significant factors in determining the reliability of the information provided during the research.
According to the researcher, the longer the periods the respondents had been with the MFIs, the more reliable were their decisions and comments given, in relation to the MFI.
Their levels of satisfaction also depended on the periods they had been with the MFIs, although a prospective customer could get satisfied or dissatisfied even on the first day of visiting the MFI.
5.2.5 – Type of loans received by customers
According to the result presented in Figure 9, on the type of loans received by customers, most of the customers got business loans, with the highest percentage of 50.4%, 20.4% for cash loans, 11.3% for school fees, and 5.7% for motorcycles.
Customers joined the MFIs with different needs, but most customers joined the MFIs to get business loans.
This was good in the sense that, customers should be able to sustain themselves through generated incomes from their businesses, to improve their standards of living and levels of poverty in their households.
Those who got cash or school fees loans wanted to solve their short-term needs, and those who got motorcycles wanted to get self-sustainability through transport business, locally refereed to as « boda boda ».
5.2.6 – Customers ability to pay the loans on time
The findings presented in Figure 10, showed that the majority of the customers (88.7%) were able to pay back the loans on time, this was a sign of good collection performance of the MFIs.
However, a small percentage of the customers (11.3%) indicated they were finding difficulties in paying back the loans.
As we shall see later in sub section 5.2.1.9, reasons given by this group were that, the periods given for them to pay back the loan was short, yet interest rates were high, and the loans received were usually less than the amounts applied or requested for.
5.2.7 – Customers satisfaction survey
Customer satisfaction survey was done and presented in two parts. The first part was to find customers satisfaction on the products and services, provided by the MFIs.
The result was presented in Figure 11 where, 83.0% of the customers were satisfied with the products and services, and 17.0% were not satisfied.
In the second part shown in Figure 12, 90.6% of the customers were satisfied with the kind of treatments they got from the MFIs, and 9.4% of the customers were not satisfied.
Customer satisfaction in the literature review was one of the key performance indicators in the customer perspective of the balanced scorecard.
Also in the strategy mapping of the BSC, high level of satisfaction was due to an effective and efficient internal business processes.
5.2.8 – Customers views on improvement of services
According to the result presented in Table 9, major problems faced by the customers were high registration fees, and high interests on the loans given to them.
There were also restrictions on the amounts of loans given to them, and in most cases, the amounts applied for were not the amounts received.
There were also lack of communication between the existing MFIs and the public and that was why there were few customers in most of the MFIs.
They recommended that the MFIs should reduce the registration fees charged for new entrants, and reduce the interest rates and extend the periods for loan repayments.
The MFIs should improve on their services, by acquiring computers, providing ATMs or/and increasing the number of tellers.
The MFIs should not reduce the amount of loans applied for by the customers. The MFIs should have good relations with other organisations so that they could get funds sufficient to run the MFIs.
MFIs should introduce other products such as agricultural loans in order to suit market demands, and customer needs.
MFIs should make the public aware of their existence through advertisements, talk shows, or workshops and they should provide training to members so that they are able to handle the loans given to them appropriately.
The customer perspective captures the ability of the organisation to provide quality goods and services, the effectiveness of their delivery, and overall customer service and satisfaction.
Many organisations today have a mission focused on the customers, and how an organisation is performing from its customers’ perspective has become a priority for top management (Kaplan and Norton, 1992).
5.2.9 – Impact of the MFI on Customers Income & Livelihood
A significant number of customers (69.8%) indicated in Table 10 that, the impact they got from the MFIs were, increase of household incomes, savings and improved standards of living, and were able to use the money in paying school fees for their children.
15.1% were able to expand their businesses.
Social and economic impacts of the microfinance institutions are the major reasons of establishing the MFIs.
According to this study, both social and economic impacts on the customers were realised, in terms of increases in the household incomes, savings and improved standards of living, and ability to pay school fees for their children, ability to expand their businesses, and so forth.
These are grouped under welfare impact, in his critical microfinance triangle, Figure 3. (Meyer, 2002).
5.2.10 – Alternative financial services for the customers
Apart from the financial services these customers got from the MFIs where they registered, the findings in Table 11 showed that 50.9% of the customers got financial services from other sources such as banks, SACCOs and other MFIs, and 49.1% of the customers got financial services from the same MFI, where they registered.
The difference between the two percentages was however, insignificant. This was also an indication that getting financial services from a particular MFI did not matter much.
However, what mattered was getting the services, and making use of the services.
Frequently Asked Questions
What percentage of customers have been with the MFIs for less than one year?
34.0% of the customers had been with the MFIs for a period less than 1 year.
What type of loans do most customers receive from MFIs in Gulu?
Most of the customers received business loans, with the highest percentage of 50.4%.
How many customers are able to pay back their loans on time?
The majority of the customers, 88.7%, were able to pay back the loans on time.
What are the major problems faced by customers of MFIs in Gulu?
Major problems faced by customers included high registration fees, high interest rates on loans, and restrictions on the amounts of loans given.