The role of loan officers and clients in the diffusion of microfinance: A study of PRIDE Zambia and CETZAM in Zambia.

Abstract

This thesis seeks to illustrate and explain the variable take-up of microfinance from the particular standpoint of the actors who actually produce and deliver microfinance. It draws attention to issues of relationships, action, tensions, and compromises in the real work of loan officers, which ultimately define how micro finance works. Few existing studies have used data outside South Asia to examine what loan officers actually do at the interface with clients and their role in the diffusion of microfinance. A central concern of this thesis is that microfinance relies heavily upon loan officers to be a critical link and facilitators of 'bottom-up' development, yet the activities of loan officers in sub-Saharan Africa and Zambia in particular, where microfinance is emerging, remain relatively under-researched. This qualitative ethnographic study was designed to examine the processes of microfinance and how it works by interviewing and observing loan officers’ interactions with clients and everyday practices. Analysis of data was conducted in accordance with grounded theory principles and organised with the assistance of the software programme, QSR NVIVO. The results reported in this thesis indicate that loan officers had multiple, ambiguous and fast changing roles, mainly driven by an institution's economic survival rather than clients' 'empowerment'. Pressure for institutional sustainability and commercialisation were also found to be changing relationships and the original character of microfinance. Furthermore, the practice of microfinance in Zambia risked transforming loan officers into 'loan repayment agents' as opposed to 'development workers' or 'enablers' of growth. The thesis concludes that loan officers are so critical that without an appropriate fieldwork-culture, microfinance cannot effectively diffuse whatever its design. The central contention of the thesis is that, sustainability and diffusion of microfinance could be flawed if it is so dependent on loan officers. Furthermore, those studies which have excluded the voice of loan officers may not be an accurate predictor of its likely performance.