Microfinance Research Articles

Determinants of Market Participation of Artisanal Gold Miners: Evidence from Kumuruk District, Northwest Ethiopia

In Ethiopia as well as most other regions of the world, the artisanal mining industry was mostly ignored, because of there are a number of factors limiting the performance of Ethiopia's artisanal mining market participation. So the purpose of this study was to determine the extent of market participation of artisanal gold miners in the Kumuruk District, Northwest Ethiopia. The respondents were chosen using a two stage sampling procedure in order to accomplish this. The initial phase involves the deliberate selection of Seven Assosa District gives rise to Kumuruk District. Five kebeles were chosen at random from the sixteen kebeles in the second stage. From the provided sampling frame, 200 respondents were chosen using a systematic random sampling technique. Tools used to analyze the data included Stata14 version and SPSS version 21 statistical software. The results of descriptive statics show that gold producers and brokers were found to be important gold market mediators at mining gate and that eight market catchments were present in the study area. Additionally, the Heckman two stage econometric estimation procedure was used to identify factors that limit gold market participation decision and gold sale weight of the artisan gold miners’ households in the study area. Informational resources, age, proximity to the market, prior mining experience, years of schooling, and household size all have a favorable and significant impact on gold market involvement. The amount of gold that each responder provided served as the depend ant changeable. Age, years of schooling, ownership of mining equipment, availability of non-mining income, cost of transportation, and informational resources were all significantly and favorably correlated with the amount of gold supplied for sales. This implies that a rise in any of these factors will result in a rise in the amount of gold offered for sale. According to the survey, efforts should be taken to open more places of sale. In order to increase market participation, mining areas should establish a direct market channel with the National Bank of Ethiopia. Additionally, youth participation in mining operations should be encouraged in order to minimize transportation expenses. Encourage the government to set up a revolving and collateral fund, and encourage microfinance institutions to open branches close to artisanal miners.

The Effect of Islamic Marketing Mix, Service Quality and Product Quality on Consumer Loyalty of Microfinance Institution: Does Perceived Value act as mediator?

The competition among financial institutions for customers is fierce. Moreover, the majority of people in Indonesia prefer giant financial institutions that are considered more competent and safe in their financial affairs. This makes some microfinance institutions such as BMT NU East Java have to try very hard in getting customers. BMT NU East Java must formulate the right strategy to get new customers and make customers loyal. This research aims to gain a great understanding on how consumer is loyal to microfinance institution and which one from Islamic marketing mix, service quality, product quality and perceived value, became variable that influence consumer loyalty. The research is quantitative research and conduct at BMT NU Jawa Timur. The data is collected from 200 consumer of BMT NU. This study is quantitative research with 200 BMT NU Jawa Timur customer samples. It uses non-probability sampling and the Data collected will be analyzed with the help of SPSS software to get statistical techniques for correlation and regression (validity test, reliability test, classic assumption test, path analysis, t-test, trimming test. The result shows that service quality and product quality were variable which most affect consumer loyalty. Perceived value also can mediate Islamic Marketing mix, service quality, and product quality variables on customer loyalty. In this case, the loyalty of consumer can be created with giving more responsiveness and empathy to consumer. It also can be created with great reliability and performance that exist in the microfinance product. The results of this research can be applied by BMT NU East Java by strengthening services and financial products to gain customer trust. This research can be a reference for other researchers who want to research Islamic microfinance by providing additional variables and different points of view

Saving and Credit Cooperatives Services and Socio-economic Empowerment of Women in Temeke Municipality, Tanzania

The majority of the SACCOS clientele consists of low-income women who form solidarity groups to obtain credit. However, poverty has persisted among women and their communities for a very long time. This study assessed the financial services that SACCOS offer to women and the impacts that SACCOS have on women's empowerment and household livelihoods in Temeke Municipality, Tanzania. Focus group discussions (FGDs) and key informant interviews (KIIs) were used in a qualitative research design to gather primary data from female members of the selected SACCOS (Mbagala Lutheran and KIUMA) on the research issue. The survey found that women use SACCOS for a wide range of services, such as savings accounts, low-cost loans, options for investing and financial advisory services. Additionally, the study revealed that SACCOS have both non-financial and financial impacts on women's empowerment and household livelihoods, including greater financial security through saving and insurance products, strengthening of financial literacy and decision-making skills among women, empowerment through participation in SACCOS leadership and decision-making, business development through access to capital and credits from SACCOS, and enhanced household ability to meet basic and material needs. This study concludes that it is through its services that SACCOS is an instrumental entity in addressing the financial inclusion gap, especially for women in Tanzania. Moreover, it is recommended based on this study that, apart from mere financial services, SACCOS and other microfinance institutions should invest in education and financial advisory services to assist women in making wise financial decisions, such as budgeting and making productive investments of capital. This is because women save more in SACCOS; however, a large number of them have continuously been trapped in a vicious cycle of financial debt, poverty, and dependency syndrome

Nexus between good governance and financial sustainability: evidence from microfinance sector of India

PurposeMicrofinance emerged as an essential catalyst for socio-economic development and financial inclusion to reduce poverty. Microfinance institutions cannot meet their primary objective of poverty reduction if they are not sustainable financially. With the theoretical support of profit incentive theory, this paper aims to investigate the impact of organizational structure (OS), growth outreach (average loan per borrower [ALPB] and number of active borrowers), women empowerment (percentage of women borrowers [PWB]), liquidity, leverage and cost efficiency (cost per borrower) on the financial sustainability of microfinance providers (MFPs) in India and explore the possible moderating effect of the national governance indicators (NGIs).Design/methodology/approachA financial sustainability index has been developed by using principal components analysis, including both conventional measures (return of assets and return on equity) and efficiency measures (operational self-sufficiency and financial self-sufficiency). Due to the existence of endogeneity and heteroskedasticity, this study uses two-step system generalized method of moments estimates to examine the relationships for a period of 2006 to 2018.FindingsThe finding reveals that there is a strong significant relationship between financial sustainability and its influential factors. Organizatioanl Structure, loan size, women borrowers, Gross Domestic Products and inflation enhance the financial sustainability of India’s microfinance sector. However, a number of borrowers, liquidity, leverage and operating costs negatively affect the financial sustainability of MFPs of India. The estimates demonstrate that NGIs significantly moderate the association between financial sustainability and its influential factors. The NGIs negatively affect the positive impact of Organizatioanl Structure on financial sustainability. National governance increases the positive effect of loan size (ALPB) and reduces the negative effect of a number of borrowers and leverage on the financial sustainability of MFPs of India. However, NGIs negatively affect the positive relationship between Percentage of Women Borrowers and Financial sustainability of Microfinance Providers of India.Originality/valueTo the best of the authors’ knowledge, this study is the first of its kind that incorporates all of the six dimensions of the National Governance Indicators (NGIs) and uses as a moderator. Secondly, a financial sustainability index has been developed for measuring the financial sustainability of Microfinance Providers (MFPs).

Microcredit, gender norms, and women’s experiences of economic coercion and agency in Matlab, Bangladesh

Microfinance organizations in Bangladesh often direct microloans to women, due in part to women’s high repayment rates. Questions remain about how microfinance institutions are addressing – or enabling – economic coercion of women taking out loans. In-depth interviews with 25 men and 24 women examined how the structure of microcredit programs, and men’s reactions to such structures, enabled or challenged women’s economic agency. We found that loan access and control was gendered, that loans were socially disruptive and engendered shame among men and women, and that this social disruption and shame was managed through practices of concealment. Interviews revealed that inequitable gender structures governing microloan administration are impeding gender transformative experiences with microloans. The results of this study illustrate the importance of considering structural and normative elements of gender systems to understand women’s experiences of economic agency and coercion around microloans.

Empowering futures: A financial literacy assessment among graduate students at Tribhuvan university

The purpose of this study is to assess the level of financial literacy among graduate students. The focus is on exploring the relationship between financial literacy and three key factors: financial attitude, financial knowledge, and financial behavior. The study targeted graduate students at Tribhuvan University's Faculty of Management (FOM) in Kathmandu valley with 710 students receiving a structured questionnaire. Total of 427 valid responses were received, establishing the sample for analysis. Descriptive and relational research designs was adopted for the analysis. Data was collected through a structured questionnaire, reflecting participants' financial attitudes, knowledge, and behaviors. The study concludes that there exists a positive association between the levels of students' financial attitudes, knowledge, and behaviors with their financial literacy. Additionally, the research findings reveal a significant and positive impact of financial attitude, knowledge, and behavior on financial literacy. Government authorities will utilize findings of the study for the development of policies aimed at enhancing financial literacy programs in Nepal. Banking and Financial Institutions (BFIs), Microfinance Institutions (MFIs) as well as regulators can use the insights to modify financial literacy programs that address the specific needs identified in the study. Professors, teachers, and trainers can incorporate with the study's results for curriculum planning, designing courses to foster financial attitudes, knowledge, and behaviors among graduate and post-graduate students.

The enablers and stumbling blocks in sustaining growth of women-owned micro-enterprises in India – a qualitative inquiry

PurposeThe study aims to understand why women-owned microenterprises (WOMEs) in India experience a lower growth rate, where growth can be represented in increments in the venture’s size or scope. There is no conclusive understanding of the factors that affect the sustained growth of WOMEs in India.Design/methodology/approachWhat personal, social and economic factors support or hinder the choice, growth and sustainability of women-owned ventures? What role do institutional factors (government, nongovernment organizations (NGOs), self-help groups and microfinance institutions) play toward the sustainability of WOMEs? The answers to these questions were obtained through a qualitative design by interviewing 30 micro women entrepreneurs from Tamil Nadu, a Southern state of India and one of the largest hubs for WOMEs and their responses were content analyzed using NVivo 12 software.FindingsThe findings capture and apply the fundamentals of two key theoretical perspectives, resource-based view (RBV) and self-determination theory (SDT), in identifying the links between the individual, social and economic factors and their combined effect on the sustained growth of women-owned micro businesses. The findings add value in identifying the ingrained cultural norms and traditions and several internal and external factors that support or challenge the growth of WOMEs. This study highlights that the interventions by the government need to be strengthened for the growth and sustainability of WOMEs.Practical implicationsThe study’s findings provide suggestions to policymakers, banks, funding agencies, financial institutions and NGOs to design applicable policies and schemes toward the sustained growth of WOMEs.Originality/valueThis study contributes toward a better understanding of the trends in the context of WOMEs from an Indian context. This topic has received little attention in the academic literature. Second, the study’s conceptual contribution is an application of SDT and RBV to understand and categorize the enablers and deterrents in the path of growth of WOMEs, which is a novel pursuit.

Navigating Loan Recovery Process from SMEs: Identifying Critical Challenges for Microfinance Institutions in Tanzania

The purpose of the study is to examine the loan recovery challenges facing Microfinance Institutions (MFIs) and Small and Medium Enterprises (SMEs) in Tanzania. The study took place at Nuru Financial and Business Services (NFBS), the Self-Microfinance Fund (SMF), and Ameic Microcredit Limited (AMC). These are among the microfinance institutions found in Dar es Salaam. The researchers employed a descriptive research design and used NFBS, SMF, and AML as study cases. The study involved 50 respondents, including credit officers, obtained through simple random sampling. In the data collection, the study used semi-structured questionnaires to gather primary data. Also, the study used secondary data from documents available at NFBS, SMF, and AML. Data were analysed using simple descriptive statistics with frequency, percentages, and mean. The study found that loan recovery was a challenging task and faced several obstacles, such as insufficiency of capital to cover recovery costs, the presence of weak internal controls on loan recovery, higher interest rates, and facing an extraordinary event during the loan recovery process. Others are getting into bitter relations with customers during loan recovery due to the incompetence of staff to address loan recovery processes. Finally, the study recommends the government provide financial support or subsidies to microfinance institutions to cover recovery costs, such as grants, low-interest loans, or financial assistance programmes. Establish and enforce regulatory standards for internal controls within microfinance institutions. Implementing policies to regulate interest rates charged by microfinance institutions to ensure fairness and transparency. Establish a legal framework to handle extraordinary events during the loan recovery process. Microfinance institutions should explore partnerships with international development organisations, impact investors, or donor agencies to secure additional funding for loan recovery efforts. Loan officers should be trained in cost-effective recovery strategies, and SMEs should engage in responsible borrowing practices to minimise the risk of default.

A comparative study of the impact of Covid-19 on the liquidity of selected microfinance finance institutions in Zambia

The aim of this paper is to conduct a comparative analysis of the impact of the COVID-19 pandemic on the liquidity of Agora Microfinance Zambia and Microfinance Zambia within Zambia. The study was significant because it showed the impact of the COVID-19 pandemic on the liquidity of microfinance institutions in Zambia. The study used three key proxy variables – cash ratio, quick ratio and net working capital ratio – to identify the relationship between the COVID-19 pandemic and MFI liquidity. COVID-19 was a surrogate for the pandemic during the COVID-19 pandemic period (2019-2021) and the pre-pandemic period (2017-2018). Using the Wilcoxon statistical testing tool, a hypothesis was developed to guide the investigation and perform a statistical test of the parameter estimates. The study employed a longitudinal research design and utilized data from the audited financial statements of microfinance institutions. Data were analyzed using STATA and Excel. It was found that the lockdowns imposed to contain the spread of the COVID-19 virus had less impact on the liquidity of the two microfinance institutions from an economic and financial perspective. The results of this research will have implications for the policies of companies and financial institutions.

Is Social Capital Determinant in Developing Islamic Microfinance Institutions?

Research Originality: One of the Islamic Microfinance Institutions (IMFI) was Baitul mal wa Tanwil (BMT) which generally has a program using the group loan methodology which is seen as utilizing existing social capital, manifested in personal relationships and networks.Research Objectives: This study aims to examine the impact of social capital factors on BMT business as an IMFI covering cultural values, religious traditions, people's world views, geographical characteristics, work ethic, institutions, and social networks.Research Methods: This study uses a mixed method explanatory with a qualitative method for testing the level of importance using the Analytic Process Hierarchy (AHP) f or the best priority in social capital factors and the ideal IMFI based on expert opinions as facilitators.Empirical Result: This result shows that the seven social capital factors at IMFI can be applied and considered applicable in developing business. The main priority factors are institutions and religious traditions. The IMFI that consistently applies social capital factors in developing IMFI business is BMT Bringhardjo (Yogyakarta) although it has not yet reached the maximum value. The determinants of social capital in the IMFIs business are considerably used to determine the IMFIs business development. It provides that the seven social capital factors at IMFI can be applied and considered applicable in developing business.Implications: The main priority factors are institutions and religious traditions. Investigating one of the IMFI was Baitul mal wa Tanwil that consistently applies social capital factors in developing IMFI business as a business that empowers social capital as a guarantee feasibility and business feasibility from micro communities that have so far been un-bankable. JEL Classification: D02, D04, O14How to Cite:Subchi, I., Jahar, A. S., & Prasetyowati, R. A.. (2024). Is Social Capital Determinant in Developing Islamic Microfinance Institutions. Etikonomi, 23(1), 233 – 248. https://doi.org/10.15408/etk.v23i1.31769.

MARKETING OF MICROFINANCE INSTITUTIONS WITH THE HELP OF SOCIAL MEDIA -AN ANALYSIS

Now Microfinance Institutions reach thousands of customers and have the opportunity to send out messages, get fast feedback, and experiment with offers at relatively low costs. Social media establish closer connections between consumers as more trustworthy sources of information regarding products and services than business-sponsored communications transmitted via the traditional elements of the promotion mix. Social media channels help to communicate and organize themselves together and allow them to reach out and relay their messages to a larger group of people to create awareness and promote a brand. This paper aims to investigate about social media platforms are being used by microfinance institutions as well as a communication tool with their customers and to identify how microfinance institutions use social media efforts to expand their opportunities in reaching their target market. This study also tries to measure the effectiveness of social media marketing in the development of microfinance institutions. Keywords: Microfinance market, social media marketing, customer attractiveness.

The Efficacy of VICOBA Intervention in Alleviating Poverty in Emerging Economies: A Study of the ORGUT SEDIT VICOBA Lending Scheme Project in Morogoro, Tanzania

Microfinance institutions have emerged as crucial agents in the fight against poverty, particularly in emerging economies. Despite debates about their effectiveness, microfinance interventions have contributed positively to socio-economic conditions, improving livelihood access. Recognising the importance of the microfinance subsector, Tanzania has instituted tools to foster financial inclusion. The Village Community Banks (VICOBA) are an example of these efforts, aiming to empower marginalised communities through financial inclusion and access to credit. This study assesses the effectiveness of the VICOBA intervention in alleviating poverty in Morogoro District, Tanzania. Using a cross-sectional design and logistic regression analysis, the study examines the relationship between key variables (access to credit, ability to save, access to insurance services, entrepreneurship skills) and poverty alleviation. The results show the effectiveness of access to credit, savings, and access to insurance services in poverty alleviation.

Relationship between microfinance institutions' self‐sustainability and financing sources: Moderating role of external governance

AbstractThe self‐sustainability of microfinance institutions (MFIs) is a growing concern as they work as non‐profit organizations to achieve global poverty reduction goals. This study aims to examine the MFIs' self‐sustainability using an efficiency measurement technique based on Data Envelopment Analysis (DEA). It also determines the influence of different financing sources on MFIs' self‐sustainability as well as the moderating impact of external governance on this relationship. It uses the Generalized Method of Moments (GMM) estimator to analyze the panel data from 661 MFIs in 86 countries during the 2010–2018 period. The DEA analysis reveals that MFIs are still in the intermediate stage of self‐sustainability in terms of technical and cost efficiency. The second‐stage regression results reveal that financing sources such as retained earnings and equity have a robust positive and statistically significant effect on the MFIs' self‐sustainability, implying that MFIs that rely more on these two sources are more likely to be self‐sustainable. The moderation analysis reveals that good governance accelerates the positive effect of financing sources on MFIs' efficiency. Given these empirical findings, MFIs' decision‐makers can benefit from considering their own funding and equity. Quality governance can be ensured by government agencies and regulatory bodies to support the MFIs' sustainability.

The Effects of Dividend Policy On the Price of Shares of Microfinance Companies In Developing Countries

The strategy of dividend policy implementation in the context of business value growth is the subject of debates in theoretical and empirical research. Dividends and retained earnings are two alternatives that investors have when deciding how to distribute their income. According to the bird-in-the-hand theory, a company’s value is maximized by paying large dividends, because investors consider the payouts less risky than capital gains, regular high dividend payments serve as an information signal to market participations about the current and future financial stability, which attracts new investors and allows attracting more external resources. Instead, according to Miller and Modigliani’s dividend irrelevancy theory, corporate value is influenced not by the division of income into dividends and retained earnings, but by investment policy and income from assets. There is a lack of research in the literature that examines the relationship between dividend payouts and stock prices in developing countries (especially in Nepal) and there is no empirical evidence that profitability can moderate this relationship. The article examines the influence of dividend yield, retention ratio and dividend payout ratio on share price both in general and directly, and indirectly-through return on assets and return on equity. The information base is data for the 2017-2021 financial years on 61 Nepalese microfinance institutions (10 of which were the direct object of the study) registered on the Nepal Stock Exchange (NEPSE), obtained from the official websites of the relevant institutions, ShareSansar and NEPSE statistics. SPSS software (PROCESS v4.3) was used for data analysis. Descriptive statistics, the correlation and regression analysis were used for the analysis. The article analyzes three types of effects: total, direct and indirect. The overall effect of dividend yield on share price is negative, the retention ratio is positive and significant, and the dividend payout ratio is negative and significant. The direct effect of the dividend yield on the stock price is negative, the retention ratio and the dividend payout ratio are positive and insignificant. The indirect effect of dividend yield and retention ratio on share price through return on assets is negative and insignificant, and through return on equity it is positive and significant. The indirect effect of the dividend payout ratio through the return on assets is positive and significant. However, the return on shareholders’ capital has a negative and insignificant effect on the share price.

The Influence of Microfinance Institutions on Nigerian Small, Micro, and Medium Enterprises

Purpose: Poverty is a significant concern in most countries, including Nigeria, which has been dubbed the world's poverty capital. Most developing countries regard small, micro, and medium-sized companies (SMMEs) as a sure strategy to reduce poverty by lowering a country's unemployment rate. Microfinance institutions (MFIs), especially banks, were commissioned by the Central Bank of Nigeria (CBN) to cater to self-employed people and businesses. There is compelling evidence that MFIs are not doing enough and are failing to fulfill their mandate. As a result, this paper sought to investigate the impact MFIs have on SMMEs in Nigeria. Design/methodology/approach: This descriptive study, made use of a convenience sample strategy to collect survey data from 384 SMMEs in two Nigerian states: Abuja and Nasarawa. Data was collected from 350 respondents. Findings: The findings showed that MFIs significantly influenced SMMEs regarding technology transfer and financial services and aided SMME (small, medium, and micro enterprises) growth. MFIs in Nigeria are ineffective in offering the services of aspects of facilitator of SMEs growth, tool for social change, provider of banking services to the people and transferor of technology. Practical implications: The CBN should make sure that MFIs, especially the banks focus more on servicing SMMEs. MFIs should do more in the areas of sensitiation and tailor their products to suit their customer base. Originality/value: There are limited studies on the Nigerian context for SMMEs and MFIs. Paper type: Research Paper

Impact of Microfinance Institutions Lending on SMEs Growth in Zimbabwe

This study investigated on the impact of microfinance lending on Small to Medium enterprises (SMEs) growth. This study adopted pragmatism philosophy wherein both positivism and interpretivism approaches were deployed. This study also adopted descriptive and explanatory research designs; the explanatory design for quantitative research and the descriptive survey for qualitative research. Proportionate stratified random sampling was used to select respondents that participated in questionnaires and judgemental sampling to select respondents who participated in interviews. Data was collected through the use of questionnaires with closed ended questions and interview guide instruments. Data was analyzed using Statistical Package for Social Sciences (SPSS), Thematic Approach, Microsoft Excel, and Microsoft Word packages. The study found that MFIs sell financial and non-financial products to clients. MFIs provide basic business skills, help with capital investment decisions, general business management and risk management. This finding extends the current body of knowledge on microfinance institutions lending impacts on SME growth. The study recommends that leadership strategy is one of the important strategies that can be embraced by MFIs to enable them survive competition in the market. MFIs need to increase flexibility, use holistic and innovative financing, employ research, take advantage of technology and make lending personal to SMEs. Because the transactions are frequently small and the clients are mostly from difficult-to-reach locations, most formal financial institutions regard the poor as high risk and high cost. Microfinance institutions must break these barriers. This allows low-income families (SMEs) to stabilize their income flows and save for future needs. MFIs need to keep on providing their services to SMEs. MFIs also need to keep providing business training to equip SMEs with requisite skills in savings mobilization and micro enterprise investment options. Policymakers and other social partners must develop and implement strategies to boost SME growth in their respective countries. To build a knowledge base for SME growth, authorities at the local, national, and regional levels must conduct evidence-based analysis to feed social dialogue and policymaking processes.

Strengthening Sharia Microfinance Regulations And Business Models In Indonesia

This article aims to elaborate on the regulation and model of Islamic microfinance in Indonesia. A clear understanding of the types of microfinance and the business model run by Islamic microfinance is needed to answer the problems faced by this institution. Solid and stable Islamic microfinance institutions serve a critical role in increasing access to loans and business capital for the poor and micro-enterprises. So far, the poor have not been reached by formal financial institution programs. This study employs a normative juridical approach using primary and secondary legal documents. The study results show that the role of the sharia supervisory board and the Cooperatives and SMEs Office has not played an optimal role in ensuring the compliance of microfinance managers with sharia principles and values and prudent microfinance management. The presence of regulations and institutions that guarantee sharia microfinance deposits is needed to protect managed funds and increase public trust.

Persepsi nasabah tentang kepuasan dan loyalitas terhadap kualitas layanan di BMT Sukosari

BMT is one form of microfinance institution in Indonesia, this institution is present to develop productive businesses of small and medium economic actors and improve the economic quality of the community in the context of poverty alleviation efforts and support the financing of economic activities, this study aims to determine customer perceptions of the quality of Islamic banking services, investigate the perceptions of Islamic bank users in Sukosari and the reasons they are interested or not Using Islamic banking whether because of sharia considerations or quality. The data collection technique was carried out by distributing questionnaires to 60 BMT Sukosari customers. The sampling technique uses purposive sampling. This research is a quantitative research with multiple linear regression data analysis tools with the help of SPSS software version 15.0. The results of this study show that there is a positive and significant influence of customer satisfaction and customer loyalty simultaneously on customer perceptions regarding the quality of service KSPSS BMT Sukosari Branch. Based on the results of simultaneous tests obtained fcalculate values of 46.349 > ftable 3.16 with significant results less than 0.005, which means proving Ha3 is accepted and HO3 is rejected. The results of the coefficient of determination (R2) test with an Adjusted R Square (R2) value of 0.606 or (60.6%) mean that the variables of customer satisfaction and customer loyalty have a significant effect on the perception of service quality of KSPSS BMT Sukosari Branch

Determinants of microfinance credit uptake and the amount of credit by smallholder dairy cattle farmers in Maara sub-county, Tharaka Nithi County, Kenya

Microfinance institutions play a crucial role in enhancing the production and productivity of smallholder farmers by providing them with the necessary financial resources. However, the adoption and utilization of microfinance credit in the Maara sub-county fall short of their potential benefits. Despite various credit service providers, not all smallholder dairy cattle farmers in this region have been able to capitalize on these services. Several factors contribute to the low uptake of microfinance credit among smallholder dairy farmers, including inadequate financial literacy, absence of collateral, high transaction costs, and insufficient infrastructure. Acknowledging that these factors are dynamic and can vary across different regions is and essential. Therefore, a comprehensive understanding of the dynamics influencing microfinance credit adoption and utilization in the Maara sub-county is lacking. This study examined microfinance credit uptake from two angles: the factors affecting its adoption and the determinants of credit size once accessed. Recognizing the interdependence of these choices, the study employed the Heckman selection model. Results indicated that factors such as years of schooling, household size, organization membership, access to extension services, and collateral availability significantly (p < 0.01) influenced microfinance credit uptake. Furthermore, schooling years, household size, and daily milk production per cow emerged as the most impactful credit size determinants (p < 0.05). The study suggests that promoting organization membership among smallholder dairy cattle farmers could enhance access to microfinance credit facilities, thereby ensuring sustainable milk production. By addressing the identified factors, the Maara sub-county could unlock the potential of microfinance credit to benefit its agricultural sector.

Identifikasi Mission Drift Pada Keadilan Jender dan Inklusi Sosial di Lembaga Keuangan Mikro Syariah

Islamic Microfinance institutions (IMFIs) their operations are expected to not only consider financial performance, but must accommodate the principles of gender justice, because humans both men, women and people with disabilities are equally as khalifatullah fil ard to manage the earth as God wills. However, several studies show a shift in the mission carried out by IMFIs. This research aims to determine the forms of mission drift that occur at IMFIs, especially Baitul Maal Wat Tamwil in 3 districts in Central Java, District of Jepara, Kudus and Demak. These three regions were chosen because they have different levels of IMFIs development. The research results show that the forms of mission drift that occur include: (1) Differences in the accessibility of financial services based on gender; (2) Changes in IMFIs customer priorities; (3) Product changes that prioritize bankable customers; (4) Increasing of Margin, Ujroh profit sharing portion and costs; (5) Changing the focus of financing to be more profit-oriented. The implication of the results of this research is that MFIs need to mainstream gender by paying attention to the portion of financing and absorbing public funds in a Gender-equity manner by encouraging balance between the portions of men and women. Regulators need to carry out strict supervision so that their commitment to maintaining the IMFIs mission values, apart from that, stimulus to institutions that prioritize gender justice also needs to be provided.