Abstract:
This study sought to examine customer switching behaviour among
microfinance customers. The study adopted the causal research design and
used nine variables from the customer switching model to determine the
customer switching behaviour in the microfinance industry. The study used
250 respondents who were conveniently sampled for data collection. The data
collected from respondents were analysed using descriptive and inferential
statistics. The findings of the study showed that customer switching behaviour
among customers of microfinance institutions is moderately high. The study
found that price, core service failure, service recovery failure, service
encounter failure, attraction by competitors, and switching cost were
statistically significant with customer switching behaviour. However,
reputation of microfinance institution and involuntary switching were found
not be statistically significant to customer switching behaviour. Service
inconvenience, core service encounter failure, and switching cost were most
significant variables. This implies that microfinance companies must consider
how these three important service challenges can be reduced in their quest to
reduce churn.
