Effectiveness of Communication Strategies on Loan Repayment Among Microfinance-Supported Women Groups in Alego-Usonga Sub County, Siaya, Kenya

Resumo

This paper assessed the effectiveness of microfinance institutions (MFIs’) communication strategies for microfinance-supported women’s groups in Alego-Usonga Sub-County, Siaya, Kenya. Anchored in Systems Theory, the study used a mixed-methods descriptive research design with 100 women borrowers selected from an estimated population of 134 and 14 MFI staff purposively selected as key informants. Structured questionnaires and key informant interviews collected data from women’s group clients and MFI staff, respectively. Quantitative data were analysed using SPSS for descriptive statistics, correlation, and binary logistic regression; qualitative data were analysed thematically. Key findings show that repayment improves when communication improves. Borrowers who received timely, clear, and respectful information were significantly more likely to repay on time; good communication quality was associated with an approximate 21-percentage-point increase in the probability of successful repayment. Two-way and participatory communication approaches outperformed top-down approaches. Face-to-face group discussions and SMS helped foster trust, reduce miscommunication, and improve accountability. Communication that overlooked borrowers’ language, education levels, and digital literacy increased exclusion and the risk of default. Overreliance on digital channels also hindered borrower–agent rapport during debt recovery. The study concludes that communication influences repayment behaviour and recommends that MFIs adopt proactive, timely, clear, and respectful communication, tailored to borrowers’ language preferences and literacy levels, combining SMS and telephone reminders with face-to-face group discussions, personalised follow-ups, and opportunities for borrower feedback.