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Author
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Theodollah, Zinyohwa
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Title
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An analysis of the challenges faced by Microfinance
organizations in the provision of financial services in Harare, Zimbabwe
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Abstract
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The current economic uncertainty in Zimbabwe is having a negative impact on the operations of
the country's manufacturing sector, including microfinance. Microfinance Institutions (MFIs) have
been exposed to a number of obstacles that have harmed their operations and, as a result, their
continuous survival. The goal of this research was to learn more about the issues that MFIs face
and what causes them. A descriptive research approach was employed to collect data from
respondents who included MFI executive directors, accountants, and loan administrators in order
to accomplish this. The study employed a sample of twenty-eight systematically selected MFIs
from a total of sixty-eight registered MFIs in Harare's Central Business District. Both primary and
secondary data were collected using questionnaires, interviews, and observations. The study's
findings revealed that tough competition is the most significant difficulty facing most MFIs. Their
issues discovered were liquidity issues, non-performing loans, a lack of employee capabilities, and
system issues. The survey also indicated that personal (shareholder) money are the most common
source of funding for MFIs, and that the government only provides technical assistance to MFIs.
MFIs, it was decided, have a number of issues as a result of the present economic downturn and a
lack of considerable government support. MFIs should engage in massive marketing, implement
strong corporate governance, invest in corporate social responsibility strategies, plough back
profits for reinvestment, and promote group borrowings by their clients to improve their cash
flows, market their institutions, and mitigate the public's negative perception of microfinance,
according to the study. The study also recommended MFIs to deal with business challenges
strategically such as hiring and training, defining job roles, monitoring employee performance and
adopting appropriate culture to motivate staff.
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Date
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2021
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Publisher
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BUSE
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Keywords
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Micro-finance
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MFI's
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Supervisor
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N/A
