| dc.description.abstract | This study examines factors prompting clients’ dropout in two microfinance
institutions: SEDA and PTF in Morogoro Municipality in Tanzania. The study used the
sample of about 136 respondents, where 68 respondents came from each institution. The
sample was composed of various subgroups of clients such as men and women, current
clients and dropouts, old and young clients. The sample was selected using the stratified
purposeful sampling procedure. Data were collected using one main method (semistructured
interview) which was supplemented by document analysis.
The study has grouped dropout factors under six categories: organization,
business, personal, family, group and competitive factors. These factors were also
grouped into two main categories, which are, adverse push factors and promising pull
factors using the ideas from the theoretical framework and the Lee’s push and pull theory
adopted in this study.
The results of the study shows that major factors which had prompted clients’
dropout at SEDA and PTF are organization factors followed by other lesser factors under
business, personal, family, group and competitive factors as presented in descending
order in Chapter Four.
Some of the major organizational factors which had prompted the dropout of
clients at SEDA and PTF are: delay in loan disbursement, inaccessible savings, high
interest rates, lack of clients care, short repayment period, deducting clients loans, dislike
of repayment pressures, problems with group loans, savings do not get interest, weekly
repayments, wastage of time in repayment meetings, short repayment period, lack of
insurance services, factors related to credit officers, small starting loans, lack of
flexibility in loan repayment and lack of training to new replacement clients.
The lesser factors under business category which have affected clients’ businesses
are: cholera outbreak, rift valley fever, relocation of people from Saba Saba market,
seasonality factor, flood, power rationing, fire, theft and selling on credit. Factors under
personal category are: multiple loans, misallocation of loan fund, resting,
transfer/migration, sickness, pregnancy/giving birth, found job/employment: default,
journey/travelling and death. Those under family category are: Sickness: husbands
stopped their wives, husbands interdicted, giving money to family members, death and
marriage failure. Those under group category are: poor repayment record, unfaith
fullness of group leaders, lack of cooperation and lack of trust. Factors under competitive
category are: better terms and services in other MFIs.
Therefore, SEDA and PTF need to address the above major organizational factors
which are greatly contributing to clients’ dropout in their organizations. Since these
factors originate from within their organizations it would be relatively easy to address
them than other factors outside their organizations.
Other lesser factors outside their organizations such as, business, personal, family
group and competitive factors contribute less to dropout. However, there is a need to
assist clients affected by these factors to reduce their dropout which may also affect their
organizations. Due to increasing competition from other MFIs which are entering the
market, there is a need for SEDA and PTF to take proactive measures aimed at improving
their services in order to retain their existing clients who may be dropping out to join
other MFI due to better terms and services. | en |
