What are the microfinance policy implications of using the Balanced Scorecard in Gulu District? This research uncovers surprising insights into performance measurement, revealing critical weaknesses in innovation and growth that could reshape the future of microfinance services.
5.3 – Employees background information
This sub section discusses the findings related to the employees’ responses, followed by discussions on the number of employees in the MFIs, educational status, employees’ positions of responsibilities, and their lengths of services with the organisation.
According to the results obtained in Table 12, one (1) out of the eight MFIs, willingly responded to the questionnaires given to them with 80% response rate. Four (4) other MFIs with response rates of 60% each were also responsive, then two (2) MFIs had a response rate of 40% each, and one (1) MFI had a response rate of 20%.
Again, the percentage of employees’ responses depended on many factors including the influence of the management of the MFIs. Some managers discouraged their employees from filling the questionnaires, and in some cases, only one or two employees were allowed to fill the questionnaires.
5.3.1 – Number of employees in the MFIs
According to the result presented in Figure 13, most respondents indicated that the number of employees in the MFIs was in the range of 0-5. This was a significant point, since it corresponded with the sample size discussed in Chapter 3.
The MFI must have at least a supervisor, a loan officer, a secretary, and an accountant, and other staffs, who might include a cleaner and an office messenger. The number of employees in each MFI is a determination factor of effective performance of the MFI, especially if all the relevant positions in the MFI have been filled.
5.3.2 – Employees Educational Status
The results presented in Figure 14 show that the highest percentage, of the employees who attained diploma, was 33.3%, followed by 28.6% for those who attained University degrees. Those with certificates from tertiary institutions was 19.0%, and those who reached secondary was 14.3%, then those who reached primary level was 4.8%.
Employees with the basic high level of education is a crucial factor in determining performance and quality of management in the MFIs, because of their ease of understanding of the procedures, processes and any other specialised training tailored towards their specific duties in the MFIs.
5.3.3 – Employees positions of responsibilities
According to the result presented in Figure 15, the highest number of employees’ positions of responsibilities in the selected MFIs was the loan officers, followed by managers, cashiers, supervisors, and secretaries.
Getting responses from nearly all categories of staff in the MFIs was good for this study, since different views from all categories of staff, avoided bias.
5.3.4 – Employees length of service with the organisation
The findings presented in Figure 16, showed that most employees had not been with the MFIs for more than 3 years. This result was expected since MFIs are just being established in the district after over 20 years of insurgency.
The environment at that period of turmoil was not conducive for such an industry, to be operational. The periods an employee had been with an organisation, is important when the employee is assessing the performance of the organisation.
Employees who have stayed longer in the organisation would have a better view about the organisation, compared to those who have not been with the organisation for long.
5.4 – Status of the Microfinance Institutions
The findings on the types of MFIs operating in the district were presented in Figure 17. It showed that the highest percentage of MFIs in the district were SACCOs and most of them had just been established, which was also in line with the government initiative to provide wealth to the poor through the “Prosperity for all” scheme.
The kinds of services offered by these SACCOs are savings and loans. The government provides funds for the SACCOs through PBU. Apart from this source, the findings indicated that these SACCOs also get little funds (9.5%) from members’ contributions, and major funds (90.5%) from shareholders, loans from other banks, and from donors.
The funds are used for servicing the loans and meeting the operational costs. Funding of the MFIs was a crucial factor in determining the effectiveness of the MFI performance.
Adequate funding provides a conducive environment for effective internal processes, high customer satisfaction, effective learning and growth, and consequently, financial stability of the Microfinance institution.
5.5 – Establishing the extent of the use of BSC
The findings on the extent of the use of BSC in the selected MFIs, presented in Table 13, indicated that a good number of respondents (80.95%) agreed that, increases in the number of customers in the MFIs was attributed to good internal business process management.
Secondly, 76.19% agreed that there were improvements in both customer satisfaction and financial outcomes due to effective and efficient internal business process management.
Thirdly, 76.19% also agreed that there were good financial outcomes because the customer satisfaction measures were being met. Fourth, 71.42% agreed that learning and growth in the organisations were seen as factors, which improved internal business processes and output goals.
Fifth, 71.43% agreed that employee competence, quality of staff and their satisfaction were related to learning and growth in the organisation.
Sixth, 57.15% agreed that, the vision and strategies for the organisations were met through financial outcome goals of the organisation. Seventh, 57.14% agreed that, effective loan recovery was related to customer satisfaction and effective internal business processes.
Then finally, 47.62% agreed that the low percentage of customer dropouts or inactive customers was related to good customer care and service provision.
In the second part of the questionnaire, a good number of respondents accepted the view that BSC was appropriate for use in their organisations, as was shown in Figure 19. A few did not respond, probably they did not understand the question and a small number indicated that, before such a concept was accepted, sufficient training be given to the staff and other stakeholders, to have the capacity to implement the concept, this would also avoid abandonment of the project at the early stages.
They also mentioned that a thorough evaluation of the effectiveness of the concept should be done, before it was applied.
In summary, the respondents generally agreed that it was appropriate for the MFIs to use the balanced scorecard. Then, they specifically agreed that, learning and growth aspects improved internal business processes, which in turn, improved customer satisfaction and financial outcomes.
Good customer care and customer satisfaction also encouraged more customers to join the MFIs, which resulted into low customer dropouts (high levels of customer loyalty), and consequently, effective loan repayment and good financial outcomes.
Frequently Asked Questions
What is the employee educational status in microfinance institutions in Gulu District?
The highest percentage of employees who attained a diploma was 33.3%, followed by 28.6% for those who attained University degrees, 19.0% with certificates from tertiary institutions, 14.3% with secondary education, and 4.8% with primary level education.
How many employees typically work in microfinance institutions in Gulu District?
Most respondents indicated that the number of employees in the MFIs was in the range of 0-5, which includes a supervisor, a loan officer, a secretary, and an accountant, among others.
What types of microfinance institutions are operating in Gulu District?
The highest percentage of MFIs in the district were SACCOs, which have just been established as part of the government initiative to provide wealth to the poor through the ‘Prosperity for all’ scheme.
What factors influence employee responses in microfinance institutions?
The percentage of employees’ responses depended on many factors, including the influence of the management of the MFIs, where some managers discouraged their employees from filling the questionnaires.