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    Concept Paper

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    Moustapha Mulonda Kibukila

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    Concept Paper

    Uploaded by

    Moustapha Mulonda Kibukila
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    Concept paper

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    27 views5 pages

    Concept Paper

    Uploaded by

    Moustapha Mulonda Kibukila

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    ORGANIZATIONAL FACTORS AFFECTING SERVICE DELIVERY AT FINCA

    INTERNATIONAL, KAMPALA – UGANDA

    1.0 Introduction

    This chapter will focus on the following: the background of the study, the statement of the

    problem, purpose of the study, objectives of the study, research questions, significance of the

    Study, scope of the study, conceptual framework and definition of terms.

    1.2 Background of the Study

    Microfinance has become an important tool for poverty reduction in many parts of the world.

    Microfinance institutions (MFIs) target the poor through innovative approaches which include

    group lending, progressive lending, regular repayment schedules, and collateral substitutes.

    From bankers’ perspective, a microfinance institution is said to have reached sustainability when

    the operating income from the loan is sufficient to cover all the operating costs (Sharma and

    Nepal, 1997). This definition adopts the bankers’ perspective and sticks to ‘accounting approach’

    of sustainability. However, Shah (1999) adopts for an ‘integrated approach’ in defining the term

    sustainability as the ‘accounting approach’ to sustainability that takes into account the financial

    aspect of the institution is too narrow for him. For Shah, the concept of sustainability includes,

    amongst other criteria, - obtaining funds at market rate and mobilization of local resources.

    Therefore, his performance assessment criteria for the financial viability of any microfinance

    related financial institution are: repayment rate, operating cost ratio, market interest rates,

    portfolio quality, and ‘demand driven’ rural credit system in which farmers themselves demand

    the loans for their project. From banker’s perspective, sustainability of microfinance institution

    includes both financial viability and institutional sustainability (self sufficiency) of the lending

    institution (Sharma and Nepal, 1997).


    In a stable political environment and enabling macro economy, evidence arising over several

    decades has supported the view that the provision of microfinance is an important component of

    any effort to improve the livelihoods of the poor in any society. In recent years in Uganda, there

    has been renewed interest in microfinance by both policymakers and practitioners. This interest

    is based on its valued contribution to efforts aimed at improving the livelihoods of the rural

    population in Uganda through policies and programs geared towards addressing inequalities

    arising from the country’s socio-political history. Microfinance refers to all types of financial

    intermediation services; savings, credit funds transfer, insurance, pension remittances, provided

    to low-income households and enterprises in both urban and rural areas, including employees in

    the public and private sectors and the self-employed (Robinson, 2002).

    In microfinance, service delivery can be considered at several levels institutional, group, and

    individual and can relate to organizational, managerial, and financial aspects (Rao, 2001).

    However, the issue of service delivery of microfinance institutions has attracted more attention in

    mainstream analysis at the expense of the service delivery the client/borrower. MFIs face an

    apparent tension between achieving service delivery and contributing to poverty reduction.

    Various researchers have argued that in democratic societies, small scale entrepreneurs have a

    right to a participatory role and full ownership of microfinance organizations including planning,

    management, and decision-making (Weitz, 1982). The basis of the argument is that the

    entrepreneurs have access to local knowledge, which is unknown to official experts. The

    supporters of this school of thought have argued that microfinance institutions should not be run

    by public sector organizations; it should rather be handed over to small farmers in order to

    generate a sense of ownership among small farmers (Sharma and Nepal, 1997) and to attain

    institutional service delivery of microfinance institutions (MFIs).


    1.2 Statement of the Problem

    The performance of FINCA International in terms of service delivery seems not encouraging

    despite the fact that international and national development programs have been giving high

    priority on service delivery to poor for many years. In response to low service delivery of

    microfinance schemes, many proposals have been forwarded for initiating small development

    program and encouraged their participation in sustainable microfinance institutions service

    delivery (Weitz, 1982; Wehnert and Shakya, 2003).

    Service delivery involves meeting customer needs and expectations in such a way that these

    customers will have a memorable experience and will opt to come back and even talk to others

    about the organization services and products.

    Service delivery of MFIs can be attributed to factors such as their contributions to social welfare,

    job creation and general economic and improvement of lives of the poor. However, despite the

    interest in the sector and the subsidies that have flowed into some of the mission-oriented MFIs,

    it appears challenging to make MFIs services viable over the long term. One survey found that

    30 percent of domestic microfinance services operating in 2015 were either no longer in

    operation or were no longer lending capital two years later (Bhatt, Painter, and Tang 2002).

    Furthermore, most MFI programs report difficulty in sustaining constant service delivery without

    continued reliance on grants, external fundraising, or other subsidies.

    Locally, a few studies have been done on the issue of sustainability of service delivery which

    included; sustainability of pilot purpose community telecentres in Kenya and Uganda (Munyua,

    2003), sustainability strategies adopted by KARI (Gicobi, 2006) and sustainability among non-

    profit organizations in Uganda (Njoya, 2004). To the researcher’s understanding, no study has

    been carried out on the effects of organizational factors on the service delivery in FINCA
    International, Kampala Uganda. This study therefore seeks to answer the question, what is the

    effect of organization factors on service delivery at FINCA International, Kampala Uganda?

    1.3 Objectives of the study

    The general objective in this study is to assess the effects of organizational factors on the service

    delivery at FINCA International, Kampala, Uganda.

    1.3.1 Specific Objectives

    In order to address the research problem, the study will be guided by three specific objectives.

    1. To establish the influence of team leadership on service delivery at FINCA International.

    2. To determine the impact of efficient demands on service delivery at FINCA International.

    3. To establish the effects of performance monitoring and feedback on service delivery at

    FINCA International.

    4. To determine the effects of support process on service delivery at FINCA International

    5. To find out the influence of human resource practices on service delivery at FINCA

    International.
    Conceptual Framework

    Independent Variable Dependent Variable

    Organizational Factors
    Management Emphasis on Sales
    Performance Monitoring and Feedback
    Efficient Demand Service Delivery
    Support Process Time
    Employee – Job fit Service quality
    Human Resources Practices
    Team Leadership

    Intervening Variables
    Political Market imperfection
    Policy Incoherence

    Figure 1: Conceptual Framework

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