Customer relationship management and customer retention in non deposit taking microfinance institutions in Uganda: a case study of Fincredit Mbale regional office

Abstract

The study examined the relationship between customer relationship management and customer retention in Fincredit Mbale Regional Office. The study had customer relationship management as the independent variable and customer retention as the dependent variable. Complaints handling, two-way communication and refund system were the constructs under the dependent variable whereas Customer loyalty was the construct under the dependent variable. This study had three specific (i) To examine the relationship between complaints handling and customer retention, (ii) To examine the relationship between two-way communication and customer retention and (iii) To investigate the relationship between refund system and customer retention. The study adopted a case study research design to do an in-depth inquiry within the phenomena in its real context. The study had a population of 1200 customer of Fincredit Mbale regional office from which a target population of 650 was established. Using Krejchie and Morgan ( 1970) statistical table a sample size of 242 was determined.. 147 out of the 242 questionnaires given to respondents were returned giving a 60.7% response rate. The data collected was analyzed using SPSS version 23 where descriptive statistics and correlations were analyzed. The study reveals a number of insightful findings. In regard to two-way communication, the findings show a significant positive weak relationship between two-way communication and customer retention at Fincredit Mbale regional office. Similarly, the findings revealed, a significant positive weak relationship between complaints handling and customer retention. Similar findings were seen in the relationship between refund system and customer retention. In this regard the study recommended the following; Non deposit taking microfinance institutions especially Fincredit should enhance their refund systems and make it a priority in paying customer refunds, monthly trainings of its loans officers. Key Words: Two-way communication, complaints handling, refund system and customer retention.