| dc.description.abstract | Customer retention in the banking and microfinance sector has, for long, been a difficult
goal for the players to attain. In addition the recent microfinance crises, most of which
occurred between 2008-2010 in several countries around the world, and the emergence of
new research findings exposed gaps in previous microfinance studies. Two of these gaps
included how customer shareholding and customer service recovery affects customer
retention in microfinance. To fill these gaps this research conducted an in depth study on
the role that these two factors, together with accessibility to financial services and credit
recovery, played in influencing microfinance customer retention. The key purpose of this
study was to establish how accessibility to financial services, customer service recovery,
credit recovery and, customer shareholding affected customer retention in Bright
Enriched Empowerment Programme (BEEP), a Non Governmental Organization dealing
in microfinance in Kenya. The location of the study was Nairobi County. The study was
guided by the following objectives: To assess how financial services accessibility
influence customer retention in BEEP; to establish the influence of customer service
recovery and customer retention in BEEP; to assess how credit recovery affected
customer retention in BEEP and; to determine how customer shareholding affected
customer retention in BEEP. A review of related literature revealed that previous studies
on MFI customer retention had not adequately focused on the customer’s perspectives
and those customer retention factors that are endogenous to the firm. The research used a descriptive cross-sectional survey design. The sampling unit involved client members of
selected groups within Nairobi County that were served by BEEP. Stratified sampling
technique was used and data was collected using structured questionnaires. The
dependent variable was customer retention while the independent variables were
accessibility to financial services, customer service recovery, credit recovery and,
customer shareholding. Statistical package for social sciences (SPSS) was used to analyze data which was then be presented in frequency tables, percentages, and cross-tabulations.
The study found that each of the independent variables: accessibility to financial services;
customer service recovery; credit recovery and; customer shareholding had a significant
and positive relationship with customer retention in BEEP at Nairobi County. In order for
BEEP and other related MFIs to enhance customer retention the study recommended
formulation of financial services policies based on carefully assessed customer needs,
implementation of effective quality and credit management systems and, innovative
customer retention practices like the unique BEEP customer shareholding practice. The
study suggested further studies to be carried to investigate the influence of customer
shareholding on credit recovery in MFIs so as to obtain a deeper comprehension of the
influence of customer shareholding on customer retention in MFIs. Further studies should
also be undertaken to explore on how customer shareholding can be employed to enhance customer retention in MFIs. | en_US |
