Impact of Information and Communication Technology (ICT) on the Growth of Microfinance Institutions (MFIs) in Zimbabwe

Abstract

The aim of the study was to evaluate the impact of Information and Communication Technology on the growth of Microfinance Institutions in Zimbabwe. The study used a sample of thirty (30) MFIs registered with the Reserve Bank of Zimbabwe, with operations in Harare Central Business District. A sequential explanatory research design was adopted with the view of adopting a mixed research approach. Purposive sampling technique was adopted. Data was gathered through interviews which were administered to branch managers of MFIs and questionnaires which were administered to MFI employees. The study revealed that most of the MFIs have partially adopted ICT. The study found out that customers’ lack of knowledge in the use of ICT, higher costs of setting up ICT, customers’ lack of ICT resources, poor network connectivity and ICT related complaints raised by MFI clients are the challenges faced by MFIs in adopting and using technology. The study revealed that adoption and usage of ICT has positively affected the operational growth of MFIs through improving revenue base, customers’ touch points, market share, and outreach to previously inaccessible customers, debt recovery and customers’ contact points. The study revealed that adoption and usage of ICT has positively affected the business efficiencies of MFIs through improvement in speed of execution of transactions, loan processing, communication with clients and business acumen of MFI employees. The study recommends that MFIs should advocate the institutions of higher learning in Zimbabwe to introduce banking and finance programmes linked with technology. The study also recommended that there should be collaboration between MFIs, technology companies and higher learning institutions to come up with technology driven products that are accessible and affordable to MFI clients.