Relations de proximité entre emprunteurs et institutions de microfinance : quel impact sur l'abandon des clients ?

In the microfinance industry, client retention has been identified as a critical factor for both social performance and financial sustainability of microfinance institutions (MFIs). Given the advantages offered by client retention, it seems to be essential to analyze the factors that can explain client dropouts in the microfinance sector. This study focuses on factors linked to the relationship clients have with their loan officer to analyze client dropouts. We assume that the higher the ratio between the number of different loan officers a client had compared to the number of his transactions with the MFI, the less intensive relationship lending is. We analyzed in this study a microfinance institution active in Ethiopia during the time period 2005-2015. Using a database of 134,858 observations and running an IV probit regression, our results demonstrate that relationship lending decreases the probability for the client to leave the MFI, showing the importance of close contacts between loan officers and clients. Moreover, women tend to be less likely to dropout, while surprisingly rural borrowers are more likely to dropout.