Microfinance Services and the Clients’ Socioeconomic Wellbeing: The Clients’ Perspective

Abstract

Purpose: Microfinance gained momentum as a tool to serve the very poor and marginalized groups excluded from the formal financial institutions. Without the right type of support, the benefits of microfinance to the targeted beneficiaries become more a rhetoric than a reality. The current study set out to investigate the effect of microfinance services to the clients’ socioeconomic wellbeing from the view point of the target beneficiaries themselves.
 Methodology: A total of 108 clients purposively selected participated in the study. The microfinance services were categorized into social services and client protection services with the response variable measured on a dichotomous scale of impact (1) and no impact (0). Primary data was collected from the clients using a self-administered questionnaire and a binary logistic regression model was used to establish the existence of impact of the microfinance services studied and the clients’ social economic wellbeing. 
 Findings: The logistic regression model seem to suggest that clients’ socioeconomic wellbeing is better attained with the right client protection policies especially during pandemic periods.
 Recommendation: It is recommended that in addition to the social services that most microfinance institutions are offering to clients, special attention be paid to integrating services that focus more on client protection.