ASSESSING THE EFFECTS OF TRAINING AND MONITORING ON ORGANIZATIONAL PERFORMANCE: A STUDY OF MICROFINANCE FIRMS IN GHANA

Abstract

Microfinance Institutions (MFIs) training and monitoring activities are widely recognized as key to loan repayment performance for loan clients especially in developing countries. Microfinance Institutions are therefore tailored to understand needing financial services so as to provide quality, but affordable financial services to their clients, and finding better strategies to recoup investments, which gives a lot of priorities to training, engagements and monitoring activities of MFIs. That being said, empirical evidence is, however, largely lacking and where present, not consistent, and a little has been done in Ghana in this regard (Chiaburu & Tekleab, 2005; Khan et al., 2011; Landa, 2018). The research aimed to investigate the training and monitoring strategies adopted by Microfinance institutions for their clients; assess the impact of training of clients on the Microfinance institutions’ performance; and evaluate the impact of monitoring systems on clients and on the Microfinance institutions’ performance. The research design used for this study was a case study, where data was coordinated from several sources being: employees, employers, human resource managers, and other management bodies in microfinance companies in Kumasi. The study also used a mixed research approach of both quantitative and qualitative. The target population were the one hundred and seventeen (117) microfinance companies in the Kumasi Metropolis. Cluster and Purposive sampling methods were applied to select the sample firms and the respondents. Considering the firms with regulated training and monitoring practices, 30 microfinance firms of which 30 employees and 30 clients and were selected using cluster, purposive and convenient sampling. Key findings from the study shows that, 90% of clients of Microfinance institutions have engagements and 95% have monitoring frameworks available, iv mostly with workers or employees (loan officers). These engagements ensure good customer service and it keeps client abreast with the institutional current issues. Also, monitoring the business condition of the clients is one of the regular tasks of the Microfinance Institutions, to check the consistency, effectiveness and proceedings of the clients so as know how clients can be able to paid back at the said time. These all contribute to the impact on clients and institutional performance in the form of improved position of MFI or clients’ business in terms of competitive advantage, increased productivity, income of workers raised, and motivation to work harder. Some challenges recorded from the survey include, lack of facilities available for the training staff in some MFIs; that the training programs are not well structured and at the end of the training little or no impact would have been made; and delay from training which affects activities of clients. By way of recommendation, MFIs can work with different bodies like micro businesses and arrange market for their clients. Also, a minimum rate set by the Bank of Ghana (under which all MFIs are), will help control the high interest rates set by some institutions