Effect of micro credit policies on customer retention in SACCOs:
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Date
2019-09
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Publisher
Kampala International University, College of Economics and Management
Abstract
The purpose of the study was about the effect of micro credit policies on customer retention in Saccos. It was carried out in Bumu cential finance Sacco along St. Balikudembe Market in Kampala district, 2016. The study was guided by three specific objectives: the micro credit policies in Bumu Central Finance Sacco, to establish the level of customer retention and to determine the relationship between micro credit policies and customer retention in SACCOS.
The study used a cross sectional descriptive research design. Methods used in data collection included: interviews, observation and questionnaire. A sample of 32respondents was used, data was analyzed using tables.
The researcher found out that Bumu Central Finance Sacco has strong policies it uses when carrying out its lending business , for credit limit , the institution has different credit limits which are based on the type of idea given and the graduation policy of the growing clients’ loan size in phases to avoid over financing and trickery by unscrupulous clients. The research found out that the institution is having a moderate rate of client’s desertion although high interest rates charged was noted to be the major cause of desertion and the poor customer handling by the field staff. The researcher found out that there is a significant inverse relationship between the credit policies and customer retention of 0.803 by Pearson correlation coefficient.
The researcher recommended that there should be encouragement of individual to acquire individual loans in order to prevent loyal clients from being penalized on behalf of those members of the group who fail to fulfill their part this is because this problem is leading to desertion of potential clients
Description
A Research Report Submitted to the College of Economics and Management in Partial Fulfillment of the Requirement for the Award of a Bachelor’s of Business Administration of Kampala International University
Keywords
Micro credit policies, Customer retention, Bumu Central Finance SACCO