What if microfinance implementation strategies could redefine performance metrics? This study uncovers surprising insights from Gulu District’s MFIs, revealing effective yet underutilized Balanced Scorecard principles that highlight critical areas for improvement in service delivery and innovation.
CHAPTER 5 – DISCUSSIONS, CONCLUSIONS & RECOMMENDATIONS
5.1 – Introduction
This chapter discusses the findings of the study, from which conclusions were drawn and recommendations made. The basic objective of this research was, to analyse the framework within which MFIs delivered their services, and to provide an assessment of their operations and financial performance, in fulfilment of the objectives of the study.
The specific objectives of the study, related to the basic objective were first to establish the extent of the use of BSC in their management practices. Second objective was to evaluate the levels of performance measurement. Third, was to evaluate the levels of service deliveries in the selected MFIs, and the fourth objective was to investigate the relations that existed between the performance measurement levels and service delivery levels in the MFIs.
The study adopted both descriptive and cross-sectional approaches while incorporating mainly quantitative research methods. Eight microfinance institutions were selected for the study, which included 53 customers and 21 employees who participated in the study. Data was collected using questionnaires, observations, and from secondary data sources, and analysed using the SPSS software package. The discussion in this chapter will follow the order of presentation and analysis in the previous chapter, hence that of the study objectives.
The following sections discuss the findings related to the customers and the employees. The discussions on the background information on these respondents were put in separate sub-sections. This was done in order to allow independent discussions on the views of those respondents separately.
5.2 – Customer background information
This sub section discusses the findings related to the customer responses, gender, educational levels, age, the periods the customers had been with the MFIs, the types of loans received, the customer’s ability to pay back the loans on time, their satisfaction levels, and the impacts the MFIs made on the lives of the customers. The alternative sources of financial services for the customers and the views of the customers regarding the improvement of the MFI services have also been discussed.
According to the results obtained in Table 4, three (3) out of the eight MFIs willingly responded to the questionnaires given to them with 90% response rate, three (3) other MFIs were also responsive, with response rates of 70%, 60%, and 50% and the remaining two (2), each with response rate of 40%. The degree of customer responses depended on many factors including the influences from the management of the MFIs, for example, some managers discouraged both their customers and employees from filling the questionnaires. Some customers intentionally, did not return the questionnaire forms.
5.2.1 – Gender of customers
According to Figure 5, on the responses of customers by gender, the percentage of male customers, 64.2%, who responded, was higher than that of female, 35.8%. The difference between the percentages depended on factors such as management influence on the customers, understanding of the questionnaires, levels of satisfaction with the MFIs, and willingness to participate in the research. The details of the gender responses in each of the selected MFIs were also represented in Table 5. The details show why the percentage of females was lower than that of males. Reasons depended on the institutional setup and religious affiliations.
5.2.2 – Educational level
The findings on educational levels of the customer respondents shown in Figure 6, indicated that the biggest number of the respondents attained secondary education, followed by those who attained primary education. The numbers of those who obtained certificates, diplomas, or university degrees were few. In the researcher’s view, people who have attained higher education tend to associate themselves with the microfinance activities as employees or shareholders rather than as customers.
However, a few join the MFIs because they are unable to get financial services from other financial institutions such as banks.
On the other hand, the fact that the biggest number of customers had attained secondary education was in agreement with the views of other scholars, who argue that most MFIs rarely serve very poor people, instead, they reach the “upper poor” in much greater numbers than the “very poor” (Hickson, 1990).
In addition, poverty has been increasingly recognized as a multidimensional phenomenon that encompasses not simply low income, but also lack of assets, skills, resources, opportunities, services and the power to influence decisions that affect an individual’s daily life. This therefore means that microfinance is no longer, for the poor of the poorest but even for those who are unable to get access to other financial services such as banks, because they lack assets and other resources, regardless of educational level.
5.2.3 – Age of the customers
The findings on the ages of the customers as presented in Figure 7 showed that most of the customers of the MFIs were, between the ages of 21 and 35 years, with 50.9%, and those between 36 and 45 years with 28.3%. The two age ranges represent the economically active group of individuals, and are the driving force of the MFI activities.
A cross tabulation between educational level and the ages of the customers, showed that, the majority of customers who reached secondary level of education, were those in the age range of 21 – 35 followed by those in the age range of 36 – 45. Moreover, for those who attained primary level of education, the majority were in the age range of 36 – 45, followed by those in the age range of 21 – 35.
Then, a few who reached diploma and university levels were within the age range of 21 – 35.
Generally, people between the age of 21 years and 45 years, are known to be economically active, and it is the period when an individual can prosper to the maximum. Beyond the age of 45 years, complex issues such as responsibilities, sicknesses, old ages start cropping up. This at the end minimises the chances of prospering.
Frequently Asked Questions
What was the main objective of the research on microfinance institutions in Gulu District?
The basic objective of this research was to analyse the framework within which MFIs delivered their services, and to provide an assessment of their operations and financial performance.
How many microfinance institutions were included in the study?
Eight microfinance institutions were selected for the study.
What methods were used to collect data in the microfinance study?
Data was collected using questionnaires, observations, and from secondary data sources.