How effective is microfinance service delivery evaluation in enhancing performance? This study reveals surprising insights from Gulu District, where microfinance institutions leverage Balanced Scorecard principles, yet face critical challenges in innovation and growth, reshaping our understanding of service delivery efficacy.
4.7 – Evaluation of Service delivery levels
This sub section presents the findings related to the third objective of this study. It is to give answers to the research question; “What are the levels of service delivery in each of the selected organisation?” To answer this question, the researcher designed eight (8) closed-ended questionnaires, and two (2) open-ended questionnaires, just like in Section 4.5 and Section 4.6.
The questionnaires were used in obtaining responses from the employees, on the evaluation of the levels of service delivery of the MFIs. The results of the findings are presented in Table 15.
The table consists of the service delivery metrics, which were selected for the study, to give quantitative measures of the service delivery levels for the selected MFIs. According to the table, service delivery levels of the MFIs were measured in terms of customer relations, minimal frequency of complaints, availability of tools & equipments, information and knowledge sharing and management, prompt provision of services, prevalence of innovations, high loan repayment rate, and high portfolio quality ratios.
On the average, 60.72% of the respondents agreed (44.05% agreed & 16.67% strongly agreed) that the selected service delivery metrics were in use, which is not a very high level of service delivery. However, 19.64% of the respondents disagreed (1.19% strongly disagreed & 18.45% disagreed), and 19.64% were undecided.
Table 15 – Evaluation of service delivery levels
| Table 15 – Evaluation of service delivery levels | |
|---|---|
| Parameter/Criteria | Description/Value |
| Customer relations | Measured as part of service delivery metrics |
| Minimal frequency of complaints | Measured as part of service delivery metrics |
| Availability of tools & equipments | Measured as part of service delivery metrics |
| Information and knowledge sharing | Measured as part of service delivery metrics |
| Prompt provision of services | Measured as part of service delivery metrics |
| Prevalence of innovations | Measured as part of service delivery metrics |
| High loan repayment rate | Measured as part of service delivery metrics |
| High portfolio quality ratios | Measured as part of service delivery metrics |
Source: Research data August 2007
The following percentages also contributed to the low value of the average service delivery. The lowest percentage of 42.85% of the respondents agreed (33.33% agreed & 9.52% strongly agreed) that the staff were provided with the right tools and equipment for their work, although 38.09% disagreed (4.76% strongly disagreed & 33.33% disagreed), and 19.05% were undecided.
Another 52.38% agreed (47.62% agreed & 4.76% strongly agreed) that the frequency of customer complaints in their organisations was low due to timeliness in service delivery, and there were high portfolio quality ratios for the MFI. Then 57.14% agreed (28.57% agreed & 28.57% strongly agreed) that customer relation management was done to gauge their needs, satisfaction, and complaints.
Another 57.15% of the respondents agreed (42.86% agreed & 14.29% strongly agreed) that their organisations regularly developed new products/services, and 57.15% agreed (38.10% agreed & 19.05% strongly agreed) there were high rates of loan repayments by customers.
On the other hand, the highest percentage of 85.72% of the respondents agreed (47.62% agreed & 38.10% strongly agreed) that information was equally shared among staff and there was a high level of work coordination. Another 80.95% of the respondents agreed (61.90% agreed & 19.05% strongly agreed) that staffs provided fast services in accordance to customer needs. The two high percentages reflected on the good performance in terms of the internal business processes.
In the second part of the third objective, some open-ended questions were given to the respondents, as follows; “What do you perceive to be the biggest obstacle to improving customer service in this organisation, and what suggestions do you have to overcome the obstacle?”. The result of the responses given by the customers was presented in Figure 21.
Figure 21 – Biggest Obstacle to improving service delivery levels
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Source: Research data August 2007
The result obtained from the responses indicates that, 23.8% of the respondents did not respond at all, and 19.0% of the respondents showed that lack of funds to finance the SACCOs was the biggest obstacle. Another, 14.3% of the respondents showed that staffs in the MFIs were few, which was an obstacle to them, and 9.5% of the respondents showed that lack of equipments & transport was the obstacle, the remaining percentage were distributed among the remaining responses each having an average score of 4.8%.
4.8 – Linking Performance & Service delivery levels
This sub section presents the findings related to the fourth objective of this study. It is to give answers to the research question; “How are the performance measurements of the MFIs related to the delivery of services?” In order to investigate the relationships between the performance levels and the service delivery levels for the selected MFIs.
The researcher used the correlation and regression analysis. Data obtained for the evaluation of performance level in the second objective, and that for the evaluation of the service delivery levels in the third objective, were used in the analyses. The significance of the associations between the two variables was also tested.
4.8.1 – Correlation Analysis
Since performance measurement and service delivery evaluations involved eight variables each, in which Likert’s scale was used for getting responses from the respondents in the range 1 to 5 corresponding to “Strongly disagree”, “Disagree”, “Undecided”, “Agree”, and “Strongly agree”. Average responses from the performance measurement evaluation, were calculated and the results presented in Table 16.
Table 16 – Performance Measurements
| Table 16 – Performance Measurements | |
|---|---|
| Parameter/Criteria | Description/Value |
| Performance measurement variables | Eight variables using Likert scale 1-5 |
Source: Research data August 2007
Average responses from the service delivery evaluation were also calculated and the results were presented in Table 17.
Table 17 – Service delivery
| Table 17 – Service delivery | |
|---|---|
| Parameter/Criteria | Description/Value |
| Service delivery variables | Eight variables using Likert scale 1-5 |
Source: Research data August 2007
Bivariate correlations were used in measuring the degree of associations between the performance measurement and service delivery variables. The average values of the two variables were not rounded up to maintain accuracies, and they were considered as continuous variables. In which case, 3Pearson’s coefficient was used, and the result of the Pearson’s correlation, also called the correlation matrix, was presented in Table 18.
Table 18 – Correlations of Performance Measurement & Service delivery
| Table 18 – Correlations of Performance Measurement & Service delivery | |
|---|---|
| Parameter/Criteria | Description/Value |
| Correlation coefficient | 0.521 |
| Significance level | 0.016 |
Source: Research data August 2007
The correlation analysis reveals that the association between the performance measurement and service delivery was slightly above average, with a correlation of 0.521, and is significant at the 0.05 level. Our significance is 0.016, and since this value is less than 0.05, the null hypothesis that there is no relationship between performance measurement and service delivery, is rejected, and confirm that some relationship exist between performance measurement and service delivery.
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3 Auchan Les 4 Temps, La Défense. ↑
Frequently Asked Questions
What metrics were used to evaluate service delivery levels in microfinance institutions?
Service delivery levels were measured in terms of customer relations, minimal frequency of complaints, availability of tools & equipment, information and knowledge sharing and management, prompt provision of services, prevalence of innovations, high loan repayment rate, and high portfolio quality ratios.
How effective was the service delivery in the selected microfinance institutions?
On average, 60.72% of the respondents agreed that the selected service delivery metrics were in use, indicating that the level of service delivery was not very high.
What were some identified weaknesses in the microfinance institutions’ performance?
Weaknesses were identified in learning, growth, and innovation perspectives, which affected overall service delivery and performance levels.