Challenges faced by microfinance institutions in providing services to their clients. Bindura town survey.
The study aimed at analysing the challenges being faced by microfinance institutions in providing financial services to their clients. The clientele was made up of the poor and marginalised (both individuals and households). The study was a survey of Bindura town community .It was carried out with the objective of finding conclusive results about challenges being faced by the rest of microfinance institutions operating in Zimbabwe. The role played by Micro financing in poverty reduction could not be overlooked. It helped in determining the challenges. A descriptive survey design was taken on which saw a set of 50 questionnaires being distributed and 8 interviews being conducted. The outcome demonstrated that lack of funding was the biggest challenge obstructing growth and improvements in the microfinance sector. This was attributed to the laws passed by government which eroded donor funding. Also, the Reserve Bank of Zimbabwe gazetted a minimum capital base which is to be maintained in its newly drafted Microfinance Policy. The majority of donors were foreign owned organisations. These organisations had their headquarters mostly in Europe, Australia and America It was observed that stiff competition from other microfinance institutions presented a serious threat to the provision of financial services to the marginalized population. This was a departure from banks and other formal financial institutions having been the major competitors previously .As recommendation it was noted that the adoption of sound corporate governance, adequate training and extensive use technology were key to the growth of Microfinance institutions and building of investor confidence.