Abstract
Microfinance refers to the provision of financial services like saving, microcredit, and insurance to the poor who have limited access to traditional banking services with the aim of reducing their poverty. However, in the last decade, the literature stresses that the microfinance institutions focus more on their profit rather than the customer. Numerous methods have been used to model customer satisfaction in microfinance. However, a large majority of these methods is unable to take into account complex interactions and dependencies between variables. They may also find difficulties in handling limited and uncertain knowledge. The objective of this article is to model the effect of microfinance-lending process operations on overall customer satisfaction. We managed to develop a fuzzy Bayesian networks model; such an approach is widely required for modeling complex systems characterized by sparse or uncertain information as well as for conducting the cause and effect analysis.
Highlights
One distinguishing feature of microfinance compared to traditional finance is the target customers.[1]
The results show that customer satisfaction, loan conditions, and service quality are more influenced by staff training and recruitment policy than by the customer’s visit and the availability of historical data
The proposed model can help managers to plan customer satisfaction strategies and improve the allocation of resources. It can be used as a customer satisfaction index to conduct a comparison between microfinance institutions (MFIs)
Summary
One distinguishing feature of microfinance compared to traditional finance is the target customers.[1]. Customer satisfaction can be seen as a result of an interaction between different factors It depends on the loan product design, the quality of service related to it, and the customer’s characteristics as well.[2,6] The key elements of the product design include maximum and minimum loan amount, grace period, loan maturity, effective interest rate, payment schedule (monthly or seasonal payments), guarantee requirements, loan type (group lending or individual lending), and the size of the initial loan. The MFIs should recruit the right people with the right skills in terms of technical, organizational, and personal competencies, or at a minimum have the capacity to learn them through training Staff training is another key point to ensure good quality and to provide better service to customers. Building a BNs model requires generally respecting several steps (Figure 2)
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