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SERVICE QUALITY OF FORMAL AND INFORMAL SECTOR MICROFINANCE INSTITUTIONS IN SOUTHERN SRI LANKA

Abstract

What are the most important attributes or determinants of service quality perceived by the clients of Sri Lankan MFIs? Are the clients of MFIs generally satisfied with the services they receive from MFIs? This paper attempts to answer above questions by using a sample consisted of 100 clients who are dealing with both these sectors to satisfy their financing needs. Analysis employed Quantitative analytical techniques to identify, prevailing service quality levels of two respective sectors as well as to identify the most important variables to customers when dealing with MFIs. The research findings indicate that the most important attribute to customers when dealing with Micro finance providers is process, further price is not a crucial determinant factor. Research indicates that informal sector is providing a marginally higher services quality. Research concludes the need for the Formal sector to be more client oriented especially regarding the loan process which research found as the decisive factor when clients selecting MFIs.

Keywords: Services quality, Satisfaction, Informal, Formal

For full paper: fmscresearch@sjp.ac.lk


Author Biography

S.A. Buddhika

Lecturer, Faculty of Management & Finance,
University of Ruhuna, Matara, Sri Lanka

L.R. Rupasinghe

Lecturer, Faculty of Management & Finance,
University of Ruhuna, Matara, Sri Lanka

S. Abeysekera

Professor of Finance, Faculty of Management,
University of Manitoba, Canada