Use of CRM in Cameroon Microfinance Industry

By 1 June 2011

“… microfinance innovators have been developing important solutions to these issues. Some have built huge organizations that serve a large number of clients and have demonstrated an impressive capacity for change. Microfinance needs to be aligned with strategies that can help MFIs to cope up some challenges regardless the business environment. Thus, CRM has been a favoured theme for various studies and reports. The use of technology and human resources …”

Microfinance Industry

Staffordshire University
Msc. in Technology Management / Ludovic KEUTCHA TANKEU

Microfinance Industry
Use of CRM in Cameroon Microfinance Industry

ABSTRACT
Key microfinance business challenges include building volume, keeping loan repayment rates high, and retaining customer.

From 1970s, microfinance innovators have been developing important solutions to these issues. Some have built huge organizations that serve a large number of clients and have demonstrated an impressive capacity for change. Microfinance needs to be aligned with strategies that can help MFIs to cope up some challenges regardless the business environment. Thus, CRM has been a favoured theme for various studies and reports. The use of technology and human resources has been a way out to understanding the behaviour, value and attitudes of customers. Though Cho et all (2002), and Gupta and Shukla, (2001) argued that the tool could help companies to provide a better customer service, increase customer satisfaction and help Marketing Staff close deals faster, it should be better to enable a holistic approach to managing the entire business strategy that is customer-satisfaction oriented.

In perspective to achieve the research objective, a qualitative research approach was used, and a quantitative approach was adopted. The qualitative data were re-coded in such a way that it can be inputted and analyzed into the SPSS program. The research elaborated the questionnaire that dealt with some significant areas such as; General Information, CRM Objectives, Strategy Setting, Implementation Initiatives, CRM Components, Project management and CRM Success Criteria and Evaluation.
The author pointed out a CRM Framework in a bid to introduce a new paradigm to the research area. This framework consists of three key elements like; Government, Private Investor, and Performance Evaluation Metrics; and was drawn from the ideology of past CRM frameworks from Payne and Frow (2006), Dasai et al (2007) and Forrester (2008).

To CRM be used in microfinance industry in Cameroon so as to enhance the customer loyalty and value, the author stands that the Government should provide a friendly business environment to help private investor to develop a customer-satisfaction culture. Performance evaluation metrics should clearly evaluate their respective activities.

ACKNOWLEDGEMENT
I give all glory and praise to Almighty Jesus Christ for His grace and mercies towards me that helped me out to achieve this project without major physical issues like illness.

I would like to be grateful towards my supervisor, Ms Margaret A/P Subramaniam and Advisor, Mr. Hiew Yiew Peng for their kind advice and constructive criticism on the research which unveiled the latent research skills in me. The knowledge you have both impacted in me will positively affect my future in terms of management skills..
To my wonderful parents, Mr. and Mrs. Tankeu, your role as enablers in making me mature is really appreciated. I will ever be grateful for your moral, financial, spiritual supports for me throughout the course of my Masters Program. May God continue dwell His mercies and strengths upon you.

To my Siblings Ange (and his wife, Larissa), Nina, Jules, Gerard, Carrine and Alain, I really appreciate your prayer and support for me. To my fiancée Tatiana Wandji, I want to re-assure you of my commitment to making real all our plans.
Lastly I would like to pay tribute to all my friends here in Malaysia especially Etienne, Olivier, Jean Paul,  Femi, Yusuf, and Chidi. You are wonderfully appreciated.

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION
1.0    Introduction to Study11
1.1    Project Background
1.2    Research Problem
1.3    Research Question
1.4    Project Aim and Objectives
1.5    Significance of Study
1.6    Methodology
1.7    Outline of the Research
1.8    Limitations
1.9    Conclusion
CHAPTER 2: LITERATURE REVIEW
2.0    Introduction
2.1    Understanding Relationship Management – CRM
2.1.1    Definitions
2.1.2    Origin and Emergence of Relationship Marketing
2.1.3    Relationships are Strategic
2.1.3.1    Strategic Relationships through Stakeholders
2.1.3.2    Relationship Value
2.1.4    CRM and the Customer Differential
2.1.4.1    Origin, Emergence, Change, and Aim of CRM
2.1.4.2    Competition Differentiation
2.1.4.3    Heightened Customer Expectations
2.1.4.4    The Key Concepts in Relationship Marketing
2.1.5    CRM Applications and technology
2.1.6    Classification and Components27
2.1.7    Setting a CRM Program
2.2    The CRM Frameworks / Models
2.2.1    The IDIC Model
2.2.2    The Quality Competitiveness Index (QCI) Model
2.2.3    The CRM Value Chain Model
2.2.4    The Payne’s Five Forces Model
2.2.5    The Dasai et al / Conceptual Model
2.2.6    The Forrester Model
2.2.7    The Maturity Model
2.3    What is Microfinance?
2.3.1    Definition and Characteristics
2.3.2    Evolution in Microfinance Industry
2.3.3    Microfinance in Cameroon
2.4    Limitations and Gaps
2.5    Theoretical Frame of reference
2.5.1    How well are the customers segments understood and individually serviced?
2.5.2    What relevance will CRM tool the Management towards value delivery that can create loyalty and satisfaction?
2.5.3    Can CRM be implementable in Cameroon MFIs in order to produce appropriate results?
2.6    Emerged Frame of Reference
CHAPTER 3: METHODOLOGY
Introduction57
3.1    Introduction into the Research Method
3.2    Research Strategy
3.2.1    Quantitative Research
3.2.2    Qualitative research
3.2.3    The Mixed Method or Triangular Approach
3.3    Data Collection
3.3.1    Survey
3.3.2    Population
3.3.3    Questionnaire Instruments and Layout
3.4    Pilot Testing
3.5    Validity
3.6    Response Rate
3.7    Data Analysis Methods used
3.8    Ethical Considerations
3.9    Confidentiality
3.10    Informed Consent
3.11    Research Design and Procedures
3.11.1    Case Study or “Now” Design
3.11.2    Correlational Design
3.11.3    Experimental Design
3.12    Conclusion
CHAPTER 4: PRESENTATION AND ANALYSIS OF DATA
4.1    introduction
4.2    Characteristics of Respondents
Final Questionnaire Usability Based on Responses from the Three Categories of MFIs in Cameroon
4.3    General Information
4.3.1    Position of Respondents
4.3.2    Number of Employee in the Company
4.3.3    Perception on CRM Meaning
4.3.4    Categorization of Companies in terms of CRM Implementation Stage
4.3.5    Medium Used to Interact with Customers in terms of Services and Feedback
4.4    Objective Setting/Strategy Development
4.4.1    Main Objective of CRM Project
4.4.2    Usability of CRM as Tool to enhance Customer Value in Cameroon
4.5    Dynamic Capability of CRM and Multichannel Integration
4.5.1    Company Online Presence
4.5.2    Websites Services
4.6    CRM Project management
4.6.1    Estimated Cost of CRM Project
4.6.2    CRM Implementation Time Frame
4.7    Information Management
4.7.1    Microfinance Institutions Tools
4.7.2    CRM Project Components
4.8    Readiness Assessment and Evaluation
4.9    Conclusion
CHAPTER 5: ARTEFACT/CONTRIBUTION/DELIVERABLE
5.1    Introduction
5.2    The Theoretical CRM Framework
5.2.1    The Government
5.2.2    The Private Investor
5.2.2.1    CRM Objective/Strategy
5.2.2.2    Employee/Management Involvement
5.2.2.3    Multi-channel
5.2.2.4    Information Technology Set-up
5.2.2.5    Customer Information and Intelligence Warehouse
5.2.3    The Performance Evaluation Metrics
5.3    Comparison between Existing Frameworks and the Artefact
5.4    Evaluation of the Artefact
CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS
6.1    Introduction
6.2    Research Question Review
6.2.1    How well are the Customers Segments understood and individually services in Cameroon Microfinance industry?
6.2.2    What relevant tool to be offered by the Management towards the value delivery that can create loyalty and satisfaction?
6.2.3    Can CRM be usable in Cameroon MFIs in order to produce appropriate results in the competitive business environment?
6.3    Recommendations and Suggestions
6.4    Limitations
6.5    Self-Review
6.6    Further Research
6.7    Conclusion
APENDICES
REFERENCES

List of  Tables
Table 2.1    Gartner’s CRM Performance Scorecard
Table 2.2    Gartner’s CRM Maturity Model for Enterprise
Table 2.3    Data collected during the FSAP Mission
Table 4.1    Distribution of Usable Responses corresponding to the MFIs Category in Cameroon

List of figures
Figure 1.1    Research Design outline
Figure 2.1    Customer Expectations driven by CRM
Figure 2.2    Various Types of CRM Solutions
Figure 2.3    CRM Technical Architecture
Figure 2.4    Customer Relationship Model
Figure 2.5    Customer Retention Program
Figure 2.6     IDIC Methodology Model
Figure 2.7    QCI Customer Management Model
Figure 2.8     CRM Value Chain
Figure 2.9    Strategic Model for CRM
Figure 2.10    Conceptual Model
Figure 2.11    Forrester CRM Model
Figure 2.12    CRM Performance Scrorecard
Figure 2.13    Different Frameworks Summary
Figure 2.14    Average Deposit Relative to GDP per Capita in the CEMAC region
Figure 2.15    Emerged Frame of Reference
Figure 3.1    Methodology Framework
Figure 3.2    Data Collections Methods
Figure 3.3    Questionnaire Design Process
Figure 3.4    Research Design Outline
Figure 4.1    Position of Respondents expressed in percentage
Figure 4.2    Microfinance Sizes expressed in terms of their employees numbers
Figure 4.3    Perception of respondents on CRM definition
Figure 4.4    Percentage Representation of Enterprise position on CRM implementation
Figure 4.5    Medium through which Companies interact with their Customers
Figure 4.6    Top Three Ranked Objectives of CRM expressed in percentage
Figure 4.7    Perception of Respondents on CRM feasibility in Cameroon
Figure 4.8    Percentage of Enterprise’s Online Presence
Figure 4.9    Services delivered through Respondents’ Website
Figure 4.10    CRM Project Cost expressed in percentage
Figure 4.11    Perceptions on CRM Implementation Time Frame
Figure 4.12    Considered CRM Components
Figure 4.13    Readiness Assessment of Microfinance Operators in Implementing CRM from the use of Gartner’s Principle
Figure 5.1    Theoretical Framework
Figure 5.2    Artefact and Existing Frameworks

  1. Microfinance Industry – Research
  2. Understanding Relationship Management – Customer RM
  3. Customer Relationship Management and the Customer Differential
  4. CRM Applications and Technology
  5. Setting a Customer Relationship Management CRM Program
  6. The Customer Relationship Management Frameworks/Models
  7. What is Microfinance?
  8. METHODOLOGY (research CRM and Microfinance)
  9. Microfinance industry in Cameroon
  10. Objective Setting/Strategy Development – CRM program
  11. The Theoretical CRM Framework (Artefact Produced)
  12. Conclusions and recommendations, Microfinance