Browsing by Author "Musekwa, Sarah"

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    Innovation Capacity, Customer Service Quality and Customer Retention in Micro Finance Institutions in Uganda.
    (2023) Musekwa, Sarah
    Customer retention is a critical issue regarding Micro finance institution is concerned in Uganda, it increases sales and profits through the high performing loans offered to the clients. The objective of the study was to examine the relationship between innovation capacities, customer service quality and customer retention in MFIs in Jinja. This study used primary data which was obtained through the use of a self-administered questionnaire. A sample of 177 respondents were obtained during the survey. Data was analysed using SPSS version 21 and deceptive statistics, Variation Inflation Factor, normal distribution, correlation to measure the degree of association between variables under consideration, and also the hierarchical regression model was used. Most (41.7%) of respondent were officers followed by (26.7%) who were supervisors. The results for the correlation portrayed that there is positive significant relationship between innovation capacity and customer retention (r=0.4736, p>01). Additionally, results show that there is positive significant positive relationship between customer service quality and customer retention (r=0.6574**, p<.01). Although, the hierarchical regression model reveals that in Model 1 there is 39.6% of customer retention in explaining Innovation capacity in micro-finance institutions in Jinja. Model show that there is a positive significant relationship between customer retention and Innovation capacity and R² was significant F (2,51) = 27.977, R2∆= 0.396: p= 0.000. An increase in innovation can strengthen the capacity and also lead to an increase in customer retention in in micro-finance institutions leading to boost overall profitability. Finally, the regression model explains that the overall of 71.7% (AdjR2 = 0.7172) of the variance in customer retention in micro-finance institutions, implying that there is 28.3% being explained by other factors. However, considering the two predictors in this study, the results show that innovation capacity and customer service quality are significant predictors of customer retention in micro-finance institutions in Jinja F (1,50) = 23.414, R2∆= 0.114, p= 0.000. hence the p-value is less than 0.05. This study recommends that micro finance institutions should attempt to segment their market to match customer needs and firm capabilities by managing customer base via effective tie ring of service delivery of quality services as well as conducting churn diagnostic monitoring of declining/ defecting customers.