Luận án chất lượng dịch vụ microfinance tại Hoi An - Kinh nghiệm của Việt Nam

MICRO-FINANCE SERVICE QUALITY: THE HOI AN CITY, VIETNAM EXPERIENCE ________________ A dissertation presented to The Faculty of the Graduate School Bulacan State University Bulacan ________________ In Partial Fulfillment of the Requirement for the Degree Doctor of Philosophy in Business Administration Major in Finance and Banking ________________ PHU HA NGUYEN 2013 a TIEU LUAN MOI download : skknchat@gmail.com © 2013 Phu Ha Nguyen ALL RIGHTS RESERVED b TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT The dissertation attempted to evaluate perceived service quality of micro-finance institutions operating in Hoi An and its impact on income improvement and social equality of clients in Hoi An in 2010-2012. Specifically, it sought answers to the following: 1. How is perceived service quality of MFIs in Hoi An in terms of: financial outreach, tangibles, responsiveness, empathy, assurance, and reliability ? 2. How may the service quality of MFIs in Hoi An be described in terms of: gender, age, education, types of business, years of relationship? 3.

How may the perceived service quality of MFIs influence income improvement and social equality of clients in Hoi An? 4. Are there significant differences in perceived service quality among formal and semi-formal sector MFIs in Hoi An when they come to providing microcredit ?. If there are, what underpins these differences? 6. What is a plan of actions to improve the effectiveness of the microcredit program with aims to improve the financial and social positions of the clients in Hoi An?.

Following a review on related theories, studies and literatures, conceptual framework on service quality, and self-developed questionnaire i TIEU LUAN MOI download : skknchat@gmail.com with a pilot study were done. Statistical frequency, reliability test, KMO and Bartlett‟s test, factor analysis were utilized, and 9 hypothesizes were tested using t-test and Pearson correlations. Some findings and conclusions about Hoi An arrived at the following : 1. The clients shared common characteristics with those drawn in other related studies in terms of female-focus lending, education, business type; 2.

Evidence on clients‟ profile in terms of years of relationship shows that MFIs in Hoi An are in the process to built up their client network. The total sum of six dimensions including: “financial outreach”; “tangibility”; “responsiveness”; “empathy”; “assurance”; and “reliability” can contribute remarkably to the total variance of the overall perceived service quality. Of which, “financial outreach” and “reliability” were most vital dimensions. The overall service quality score of formal sector MFIs was higher than that of semiformal sector MFI‟s.

The overall perceived service quality has significant impact on income improvement and social equality of the clients. Recommendations were made to management of MFIs include: MFIs‟ awareness in meeting with service quality standards, responsibilities of clients to micro-credit conditions, and efforts to use loans efficiently. Suggestions on an action plan include: sets of criteria and required steps. Furthermore, there are also recommendations to future academic researches based on limitations of the study.

ii TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENTS This study could not have been possible without the generous help of a number of people who motivated, inspired, assisted, and supported the author in her endeavor. Their names are gratefully acknowledged and their precious memories will always be treasured. Andy NG YOKE BENG, the author‟s supervisor for his precious time, experiences, knowledge, advice for modification from the beginning to the completion of the study; To the author‟s husband, children, mother in law for their encouragement and taking care; To the author‟s parents for being so supportive in time of needs; To the micro-finance experts in Hoi An, whose advice for modification of the survey questionnaire; To Mr. Ne VO, People Committee of Cam An Ward, Hoi An City for his great support; To members of Hoi An Women Union for their time and efforts to deliver and collect survey questionnaires; To the respondents of the study; To my beloved friend and colleague, Dr.

Van DINH Thi Thanh for her precious support. Finally, all the study requires many hours of the author to writing and typing iii TIEU LUAN MOI download : skknchat@gmail.com LIKE THE MASTER THESIS, THIS DISSERTATION IS DEDICATED TO MY HUSBAND AND MY CHILDREN BECAUSE OF THEM IS A CONSTANT SOURCE OF INTELLECTUAL INSPIRATION AND TREASURE OF LOVE iv TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS Page APPROVAL SHEET COPYRIGHT PAGE ABSTRACT i ACKNOWLEDGEMENTS iii DEDICATION iv TABLE OF CONTENTS v LIST OF TABLES vii LIST OF FIGURES viii ACRONYMS ix Chapter 1 THE PROBLEM AND ITS BACKGROUND 1 1.2 Statement of the Problem 4 1.3 Significant of the Study 6 1.4 Scope and Delimitation of the Study 10 2 THEORITICAL FRAMEWORK 15 2.1 Relevant Theories on Service Quality 15 2.2 Relevant Theories on Microfinance 30 2.3 Relevant Literatures and Studies on Service Quality 54 2.4 Proposed Dimensions for Microfinance Service Quality 67 Measurement 2.5 Conceptual Framework of the Study 71 2.6 Hypotheses of the Study 73 2.7 Definitions of Terms Used in the Study 74 3 METHODOLOGY 79 3.1 Methods and Techniques of the Study 79 3.2 Population and Sample of the Study 82 3.3 Instrument of the Study 84 3.4 Method of Gathering Data 90 v TIEU LUAN MOI download : skknchat@gmail.com 4 PRESENTATION, ANALYSIS, AND INTERPRETATION OF 92 DATA 4.1 General Information on Client‟s Profile 93 4.2 Service Quality, Income Improvement, and Social Equality 100 4.3 Interpretation on Determinants of Service Quality 108 4.4 Hypothesis Testing 115 5 SUMMARY, FINDINGS, CONCLUSION, AND 123 RECCOMENDATIONS 5.4 Recommendations 130 REFERENCES 136 APPENDICES 158 CIRICULUM VITAE 167 END NOTES 171 vi TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table Page 2.1 Outstanding loans of key formal sector MFIs 42 2.2 Outstanding loans of semiformal sector MFIs 43 2.3 Liabilities structure of core MFIs of Vietnam 45 2.4 Characteristics of Formal Sector MFIs and Semiformal Sector 46 MFIs 2.5 Comparison of prior vs. post poverty reduction (%) of 51 microfinance clients in Vietnam 2.6 Critical Contac Points to Dissatisfaction with Customer Service 63 4.1 Frequency Distribution of Gender 94 4.2 Frequency Distribution of Age 95 4.3 Frequency Distribution of Education 97 4.4 Frequency Distribution of Business Type 98 4.5 Frequency Distribution of Years of Relationship 100 4.6 KMO and Bartlett‟s Test for Service Quality 101 4.7 Factor Analysis with Principle Dimensions and Items after 103 Rotation 4.8 Factor Analysis with Dimensions and Items after Rotation 107 4.9 Mean Comparison for Accessibility, Funding conditions, 116 Costs/price; Tangibles; Responsiveness; Empathy; Assurance 4.10 Independent Sample T-Test 117 4.12 Results of all the hypothesizes tested 122 vii TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure Page 2.1 Gronross and ROM Models 24 2.2 SERVQUAL and SERVPERP Models 27 2.3 The Country Context 31 2.4 Microfinance Network in Vietnam 41 2.6 Vietnam microfinance: Gender structure of clients 49 2.7 Geographical segment in Vietnam microfinance market 52 2.8 Service Quality Measurement 57 2.9 Clients Satisfaction on Funding Conditions and Trusts in 58 Vietnam‟s MFIs 2.11 Matching Two Sets of Dimensions used in Measuring Service 69 Quality in Microfinance 2.12 Matching the Common Dimensions developed by S. Balemba (2009) with Parasuraman et al.13 Conceptual Framework of the Study 71 viii TIEU LUAN MOI download : skknchat@gmail.com ACRONYMS Agribank The Agriculture Development Bank of Vietnam CCF Central Credit Fund CGAP Certified Government Auditing Professional CEP Capital Aid Fund for Employment of the Poor HWU Hoi An Women Union NGOs Non-Governmental Organizations MFIs Micro-Finance Institutions MUCTC Montreal Urban Community Transit Commission PCA Principle Component Analysis PCFs People Credit Funds QSO Quang Nam Statistics Office SBV State Bank of Vietnam VBSP Vietnam Bank for Social Policies VMWG Vietnam Micro-Finance Working Group VSO Vietnam Statistics Office WAGES Women and Association for Gain both Economic and Social Development WTO World Trade Organization TIEU LUAN MOI download : skknchat@gmail.com Chapter 1- The Problem and It’s Background 1.1- Introduction Hoi An city (“Hoi An”), which is located in Quang Nam province - Vietnam, is home to approximately 120,000 inhabitants.

As one of the third-class cities in Vietnam, Hoi An is not only recognized by the UNESCO‟s certification of World Cultural Heritage since 1999 but also said to be a well served place for microfinance analysis with the outreaching of microfinance industry in recent years (K. There are four main sources of information on microfinance and poverty alleviation – Quang Nam Statistics Office (“QSO”), Vietnam Bank for Social Policies (“VBSP”) Hoi An Branch, The Agriculture Development Bank of Vietnam (“Agribank”) Hoi An Branch, and Hoi An People Credit Funds (“PCFs”). According to the “2011 Statistical Year-Book” by QSO, Hoi An had 10,066 near-poor households and 2,966 poor ones, accounting for 33.55 percent of its total population respectively1. The permanent appearance of microfinance institutions (“MFIs”) in association with the economic policy launched by the local government developing the city towards “trade, tourism and services” would support the low income clients with more opportunities to access to microfinance services.

Hoi An microfinance industry is expected to reach over 15,000 active clients by 20152. Besides, the rapid growth of Hoi An‟s microfinance sector has brought about strong 1 TIEU LUAN MOI download : skknchat@gmail.com competition among MFIs, highlighting the critical need to establish long-term relationship with clients and to attract new customers by offering higher service quality. For the past several decades, research on microfinance have focused predominantly on two goals: the role of microfinance as a tool for alleviating and reducing poverty, and impact assessment of microfinance on client outreach and financial sustainability (Basu et al, 2004; Pal, 1999; Porter, 2003). Substantial progress has been made in understanding the movement of microfinance from only social welfare approach to balancing both the two goals: the social welfare and financial sustainability (J.

Ledgerwood et al, 2000). However, progress in understanding the needs to take care clients with better service quality and responsibilities of clients in funding conditions commitments, especially the effect of microfinance service quality on income improvement, job creation, social and psychological empowerments for low-income clients have been much slower because of few studies and literatures. Therefore, there is a significant gap that the author would like to undertake to further contribute to the scanty literatures, particularly in the context of Vietnam. Nowadays, service quality has a correlation of best practices and principles in providing financial services to the clients through image and philosophy, client selection, loan policies, disbursement and monitoring, client incentives, culture of zero tolerance, and management of information system, 2 TIEU LUAN MOI download : skknchat@gmail.

Service providers need to be conscious of providing reliable and timely services to their clients while clients need to see whether they should lay the truth or confirm their loyalty with the service providers. That continued interactions are key tenants to the success of every service provider. It is certain that service quality plays an important role in the customer‟s service experience. Better service quality increases perceived service value and improves the service provider‟s customer retention and financial performance (Cronin et al, 2000; Nguyen et al, 1998; Rust et al, 1993).

The great emphasis on service quality has given birth to multiple studies and innovative methodologies to assess and to understand client behavior. On this basis, the present study aims to provide an useful adaptation of the SERVPERF‟s methodology to measure service quality, which is created by Cronin and Taylor (1992), accompanying with 6 dimensions that obtained from SERVQUAL‟s framework provided by Parasuraman et al, (1988) and indicators appropriate to the specific conditions of microfinance in Vietnam. They would be “financial outreach” which includes accessibility, funding conditions, costs/price, “reliability”, “tangibles”, “responsiveness”, “empathy”, “assurance”, and “reliability”. The study would use the 6 dimensions as main drivers in evaluating perceived service quality, and its impact on income improvement and social equality of low income clients in Hoi An.

The proposed hypothesizes will be tested against data collected from a survey method distributed to clients using 3 TIEU LUAN MOI download : skknchat@gmail.com micro-finance services in the geographic area of Hoi An. Furthermore, the results of the study could provide guidelines and directions to the managerial level for arranging appropriate strategies in microfinance sector.