| dc.description.abstract | This report presents the findings of a survey on the factors that affect the
productivity of credit officers in Micro finance Institutions. The research was
conducted in four of the leading MFls that use the replica of Grameen model for
providing credit to micro and small businesses. These model uses solidarity
groups to facilitate provision of small loans to clients without collateral.
From best practice credit officers are expected to handle a range of between 300
to 500 active clients. From the findings of this study, most of the credit officers
handle less than 300 active clients. This could be explained by the economic
situation in the country whereby most credit clients are fearful of taking up loans
because their businesses are not doing well. Because of the low client base the
researcher used the mean value from the sample which was 230 active clients to
differentiate the more from the less productive cas. It was noted that most of
the COs had the expected average portfolio per client of Ksh.30,000. This
signifies that they are serving the MSEs.
A productivity index for rating each the COs was developed using i) number of
active clients; ii) the average number of loans falling into arrears; iii) the average
number of defaulters; and iv) number of clients leaving the groups. The
measures were given the weights of 0.6, 0.1, 0.2, and 0.1 respectively. The first
measure had the highest weight since it is the one that is recommended
according to best practise. However, productivity cannot be taken at face value
in a complex economy since there are several unattractive or negative outputs,
which counter good output. For this reason, the researcher used the latter three
measures to control or gauge the main output measure.
The six independent factors in the study were found to have a 9% effect on the
productivity of the COs. The factor found to be most significant was experience.
The COs with more experience were found to be more productive - the saying
"experience is the best teacher" really applies. Education was not found to have
any significant effect on productivity. The COs had either college diploma or
university degree and the findings indicated that there was no difference in the
productivity of COs regardless of their education level.
It was observed that one organisation was at expansion stage and had many
new COs. These COs had very few groups and seemed to be doing promotion
and mobilisation. For any organisation in an expansion stage, it is expected that
its output or productivity to be low due to the new systems and staff are being
employed.
This being an exploratory study there are many issues it has raised that need
further research. An issue at hand is the education or qualification requirements
of the credit officers. The other issue is the geographical coverage as most COs
are concentrated in the same area and competition challenges have made them
less productive. | en |
