Social Responsibility Practices in the Marketing of Loans by Microfinance Companies in Ghana, the Views of the Customer
Affiliation(s)
1 School of Management & Economics, University of Electronic Science & Technology of China, Chengdu, China. 2 Faculty of Business and Management Studies, Koforidua Polytechnic, Koforidua, Ghana. 3 School of Computer Science, University of Electronic Science & Technology of China, Chengdu, China. 4 Department of Statistics, University for Development Studies, Navrongo, Ghana.
1 School of Management & Economics, University of Electronic Science & Technology of China, Chengdu, China. 2 Faculty of Business and Management Studies, Koforidua Polytechnic, Koforidua, Ghana. 3 School of Computer Science, University of Electronic Science & Technology of China, Chengdu, China. 4 Department of Statistics, University for Development Studies, Navrongo, Ghana.
ABSTRACT
Microfinance companies provide loans and other facilities like savings, insurance, and transfer services to poor low-income household and microenterprises. It is expected that by the nature of their customers and services, microfinance companies will be strictly socially responsible in dealing with customers to protect and preserve their rights, but this is not always the case. This research observes the views and concerns of customers about the social responsibility practices of microfinance companies in Ghana, especially, the customer’s right to be informed, to be safe, to choose, and to be heard. The sample is drawn from two major cities, the Accra Metropolis and Kumasi Metropolis of Ghana, and the respondents constitute past and present customers of micro-finance companies providing services under the Tier-2 category of microfinance institutions in Ghana. The analysis of the data shows that respondents perceive microfinance companies having transacted with not doing much to ensure that the customer’s rights are protected. Based on the analysis and results of the survey, recommendations are made to managers of microfinance companies and the Ghana Association of Microfinance companies.
Microfinance companies provide loans and other facilities like savings, insurance, and transfer services to poor low-income household and microenterprises. It is expected that by the nature of their customers and services, microfinance companies will be strictly socially responsible in dealing with customers to protect and preserve their rights, but this is not always the case. This research observes the views and concerns of customers about the social responsibility practices of microfinance companies in Ghana, especially, the customer’s right to be informed, to be safe, to choose, and to be heard. The sample is drawn from two major cities, the Accra Metropolis and Kumasi Metropolis of Ghana, and the respondents constitute past and present customers of micro-finance companies providing services under the Tier-2 category of microfinance institutions in Ghana. The analysis of the data shows that respondents perceive microfinance companies having transacted with not doing much to ensure that the customer’s rights are protected. Based on the analysis and results of the survey, recommendations are made to managers of microfinance companies and the Ghana Association of Microfinance companies.
Cite this paper
Brew, Y. , Chai, J. , Addae-Boateng, S. , Sarpong, S. (2015) Social Responsibility Practices in the Marketing of Loans by Microfinance Companies in Ghana, the Views of the Customer. Open Journal of Business and Management, 3, 349-363. doi: 10.4236/ojbm.2015.34034.
Brew, Y. , Chai, J. , Addae-Boateng, S. , Sarpong, S. (2015) Social Responsibility Practices in the Marketing of Loans by Microfinance Companies in Ghana, the Views of the Customer. Open Journal of Business and Management, 3, 349-363. doi: 10.4236/ojbm.2015.34034.
References
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http://www.myjoyonline.com/business/2014/march-7th/number-of-licensed-microfinance-companies [2] (2014) BoG Backs Down on Microfinance Freeze.
http://business.peacefmonline.com/pages/finance/201406/203917.php [3] Asiama, J. and Osei, V. (2007) Working Paper. A Note on Microfinance in Ghana. Bank of Ghana.
http://www.bog.gov.gh/index.php?option=com_content&view=article&id=382:a-note-on-microfinance-in-ghana&catid=125:sector-study-reports&Itemid=249 [4] Ministry of Finance and Economic Planning—Ghana (MoFEP—Ghana) General Background on Global Microfinance Trends.
http://www.mofep.gov.gh/sites/default/files/pages/microfinance_0.pdf [5] Kotler, P., Armstrong, G., Sauders, J. and Wong, V. (2002) Principles of Marketing. 3rd Edition, Pearson Education, Essex, England. [6] Dibb, S., Simkin, L., Pride, M.W. and Ferrell, O. (2001) Marketing: Concepts and Strategies. 4th Edition, Houghton Mifflin, Boston. [7] Jobber, D. (2004) Principles and Practice of Marketing. 4th Edition, McGraw-Hill International, London. [8] Kurtz, D. and Boone, E. (2006) Priciples of Marketing. 12th Edition, Thomson Higher Education, Ohio, USA. [9] Kotler, P. and Armstrong, G. (2012) Principles of Marketing. 14th Edition, Pearson Education Limited, Essex, England. [10] American Marketing Association (2013) Definition of Marketing.
http://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx [11] The Chartered Institute Of Marketing (2009) Marketing and the 7Ps.
http://www.cim.co.uk/marketingresources [12] Kotler, P. (1997) Marketing Management: Analysis, Planning, Implementation, and Control. 9th Edition, Prentice Hall, Upper Saddle River. [13] Pirsch, J., Gupta, S. and Grau, S.L. (2007) A Framework for Understanding Corporate Social Responsibility Programs as a Continuum: An Exploratory Study. Journal of Business Ethics, 70, 125-140.
http://dx.doi.org/10.1007/s10551-006-9100-y [14] Ralston, E.S. (2010) Deviance or Norm? Exploring Corporate Social Responsibility, European Business Law Review, 22, 397-410.
http://dx.doi.org/10.1108/09555341011056177 [15] Galbreath, J. (2009) Building Corporate Social Responsibility into Strategy. European Business Law Review, 21, 109-127.
http://dx.doi.org/10.1108/09555340910940123 [16] Lantos, G.P. (2001) The Boundaries of Strategic Corporate Social Responsibility. Journal of Consumer Marketing, 18, 595-632.
http://dx.doi.org/10.1108/07363760110410281 [17] Carroll, A.B. (1999) Corporate Social Responsibility: Evolution of a Definitional Construct. Business Socity, 38, 268-295.
http://dx.doi.org/10.1177/000765039903800303 [18] European Commission (2001) Promoting a European Framework for Corporate Social Responsibilities. COM, Brussels, 366. [19] Mackenzie, C. (2007) Boards, Incentives and Corporate Social Responsibility: The Case for a Change of Emphasis. Corporate Governance: An International Review, 15, 935-943.
http://dx.doi.org/10.1111/j.1467-8683.2007.00623.x [20] Singhapakdi, A. (1999) Perceived Importance of Ethics and Ethical Decisions in Marketing. Journal of Business Research, 45, 89-99.
http://dx.doi.org/10.1016/S0148-2963(98)00069-1 [21] Carroll, A.B. (1979) A Three-Dimensional Conceptual Model of Corporate Performance. The Academy of Management Review, 4, 497-505. [22] Carroll, A.B. (1991) The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, 34, 39-48.
http://dx.doi.org/10.1016/0007-6813(91)90005-G [23] Lantos, G.P. (200) The Ethicality of Altruistic Corporate Social Responsibility. List of Journal Abbreviations, 19, 205-232.
http://dx.doi.org/10.1108/07363760210426049 [24] Kimenyi, M.S., Wieland, R.C. and Von Pischke, J.D. (1998) Strategic Issues in Microfinance. Ashgate Publishing, Aldershot. [25] Ghana Statistical Service (2012) 2010 Population and Housing Census Final Results Ghana Statistical Service.
http://www.statsghana.gov.gh/docfiles/2010phc/2010_POPULATION_AND_HOUSING_CENSUS_FINAL_
RESULTS.pdf [26] Ghana Association of Microfinance Companies (GAMC) (2011) Members Code of Conduct. Members Code of Conduct. www.gamcapex.og [27] Addae-Boateng, S., Xiao, W. and Brew, Y. (2014) Governance Issues in Family Businesses. International Journal of Economics, Commerce and Management, II, 1-28. [28] Addae-Boateng, S., Wen, X. and Brew, Y. (2015) Contractual Governance, Relational Governance, and Firm Performance?: The Case of Chinese and Ghanaian and Family Firms. American Journal of Industrial and Business Management, 5, 288-310.
http://dx.doi.org/10.4236/ajibm.2015.55031 [29] Addae-Boateng, S., Ayittah, S.K. and Brew, Y. (2013) Problems and Prospects of Selling in Reseller Markets in the Fast Moving-Consumer-Goods (FMCG) Industry Using the Sales Force; the Case of Y&K Investments Limited, Koforidua, Ghana. Journal of Business Management, 5, 124-139. [30] Brew, Y., Junwu, C. and Addae-Boateng, S. (2015) Corporate Social Responsibility Activities of Mining Companies: The Views of the Local Communities in Ghana. American Journal of Industrial and Business Management, 5, 457-465.
http://dx.doi.org/10.4236/ajibm.2015.56045 [31] Brew, Y., Junwu, C. and Addae-Boateng, S. (2015) Mining Communities’ Perceptions of Corporate Social Responsibility in Ghana. International Journal of Economics, Commerce and Management, III, 514-528. [32] Quaye, I., Abrokwah, E., Sarbah, A. and Osei, J.Y. (2014) Bridging the SME Financing Gap in Ghana: The Role of Microfinance Institutions. Open Journal of Business and Management, 2, 339-353.
http://dx.doi.org/10.4236/ojbm.2014.24040 [33] De Vos, A.S. (1998) Research at Grass Roots: A Primer for the Caring Professions. 1st Edition, Van Schaik Publishers, Pretoria. [34] Saunders, M.N.K., Lewis, P. and Thomhill, A. (2012) Research Methods for Business Students. 6th Edition, Financial Times/Prentice Hall, Upper Saddle River.
[1] (2014) Number of Licensed Microfinace Companies Hit Almost 400.
http://www.myjoyonline.com/business/2014/march-7th/number-of-licensed-microfinance-companies [2] (2014) BoG Backs Down on Microfinance Freeze.
http://business.peacefmonline.com/pages/finance/201406/203917.php [3] Asiama, J. and Osei, V. (2007) Working Paper. A Note on Microfinance in Ghana. Bank of Ghana.
http://www.bog.gov.gh/index.php?option=com_content&view=article&id=382:a-note-on-microfinance-in-ghana&catid=125:sector-study-reports&Itemid=249 [4] Ministry of Finance and Economic Planning—Ghana (MoFEP—Ghana) General Background on Global Microfinance Trends.
http://www.mofep.gov.gh/sites/default/files/pages/microfinance_0.pdf [5] Kotler, P., Armstrong, G., Sauders, J. and Wong, V. (2002) Principles of Marketing. 3rd Edition, Pearson Education, Essex, England. [6] Dibb, S., Simkin, L., Pride, M.W. and Ferrell, O. (2001) Marketing: Concepts and Strategies. 4th Edition, Houghton Mifflin, Boston. [7] Jobber, D. (2004) Principles and Practice of Marketing. 4th Edition, McGraw-Hill International, London. [8] Kurtz, D. and Boone, E. (2006) Priciples of Marketing. 12th Edition, Thomson Higher Education, Ohio, USA. [9] Kotler, P. and Armstrong, G. (2012) Principles of Marketing. 14th Edition, Pearson Education Limited, Essex, England. [10] American Marketing Association (2013) Definition of Marketing.
http://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx [11] The Chartered Institute Of Marketing (2009) Marketing and the 7Ps.
http://www.cim.co.uk/marketingresources [12] Kotler, P. (1997) Marketing Management: Analysis, Planning, Implementation, and Control. 9th Edition, Prentice Hall, Upper Saddle River. [13] Pirsch, J., Gupta, S. and Grau, S.L. (2007) A Framework for Understanding Corporate Social Responsibility Programs as a Continuum: An Exploratory Study. Journal of Business Ethics, 70, 125-140.
http://dx.doi.org/10.1007/s10551-006-9100-y [14] Ralston, E.S. (2010) Deviance or Norm? Exploring Corporate Social Responsibility, European Business Law Review, 22, 397-410.
http://dx.doi.org/10.1108/09555341011056177 [15] Galbreath, J. (2009) Building Corporate Social Responsibility into Strategy. European Business Law Review, 21, 109-127.
http://dx.doi.org/10.1108/09555340910940123 [16] Lantos, G.P. (2001) The Boundaries of Strategic Corporate Social Responsibility. Journal of Consumer Marketing, 18, 595-632.
http://dx.doi.org/10.1108/07363760110410281 [17] Carroll, A.B. (1999) Corporate Social Responsibility: Evolution of a Definitional Construct. Business Socity, 38, 268-295.
http://dx.doi.org/10.1177/000765039903800303 [18] European Commission (2001) Promoting a European Framework for Corporate Social Responsibilities. COM, Brussels, 366. [19] Mackenzie, C. (2007) Boards, Incentives and Corporate Social Responsibility: The Case for a Change of Emphasis. Corporate Governance: An International Review, 15, 935-943.
http://dx.doi.org/10.1111/j.1467-8683.2007.00623.x [20] Singhapakdi, A. (1999) Perceived Importance of Ethics and Ethical Decisions in Marketing. Journal of Business Research, 45, 89-99.
http://dx.doi.org/10.1016/S0148-2963(98)00069-1 [21] Carroll, A.B. (1979) A Three-Dimensional Conceptual Model of Corporate Performance. The Academy of Management Review, 4, 497-505. [22] Carroll, A.B. (1991) The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, 34, 39-48.
http://dx.doi.org/10.1016/0007-6813(91)90005-G [23] Lantos, G.P. (200) The Ethicality of Altruistic Corporate Social Responsibility. List of Journal Abbreviations, 19, 205-232.
http://dx.doi.org/10.1108/07363760210426049 [24] Kimenyi, M.S., Wieland, R.C. and Von Pischke, J.D. (1998) Strategic Issues in Microfinance. Ashgate Publishing, Aldershot. [25] Ghana Statistical Service (2012) 2010 Population and Housing Census Final Results Ghana Statistical Service.
http://www.statsghana.gov.gh/docfiles/2010phc/2010_POPULATION_AND_HOUSING_CENSUS_FINAL_
RESULTS.pdf [26] Ghana Association of Microfinance Companies (GAMC) (2011) Members Code of Conduct. Members Code of Conduct. www.gamcapex.og [27] Addae-Boateng, S., Xiao, W. and Brew, Y. (2014) Governance Issues in Family Businesses. International Journal of Economics, Commerce and Management, II, 1-28. [28] Addae-Boateng, S., Wen, X. and Brew, Y. (2015) Contractual Governance, Relational Governance, and Firm Performance?: The Case of Chinese and Ghanaian and Family Firms. American Journal of Industrial and Business Management, 5, 288-310.
http://dx.doi.org/10.4236/ajibm.2015.55031 [29] Addae-Boateng, S., Ayittah, S.K. and Brew, Y. (2013) Problems and Prospects of Selling in Reseller Markets in the Fast Moving-Consumer-Goods (FMCG) Industry Using the Sales Force; the Case of Y&K Investments Limited, Koforidua, Ghana. Journal of Business Management, 5, 124-139. [30] Brew, Y., Junwu, C. and Addae-Boateng, S. (2015) Corporate Social Responsibility Activities of Mining Companies: The Views of the Local Communities in Ghana. American Journal of Industrial and Business Management, 5, 457-465.
http://dx.doi.org/10.4236/ajibm.2015.56045 [31] Brew, Y., Junwu, C. and Addae-Boateng, S. (2015) Mining Communities’ Perceptions of Corporate Social Responsibility in Ghana. International Journal of Economics, Commerce and Management, III, 514-528. [32] Quaye, I., Abrokwah, E., Sarbah, A. and Osei, J.Y. (2014) Bridging the SME Financing Gap in Ghana: The Role of Microfinance Institutions. Open Journal of Business and Management, 2, 339-353.
http://dx.doi.org/10.4236/ojbm.2014.24040 [33] De Vos, A.S. (1998) Research at Grass Roots: A Primer for the Caring Professions. 1st Edition, Van Schaik Publishers, Pretoria. [34] Saunders, M.N.K., Lewis, P. and Thomhill, A. (2012) Research Methods for Business Students. 6th Edition, Financial Times/Prentice Hall, Upper Saddle River.