Challenges of Transformation Process from Microfinance to Microfinance Bank and its Effects on the Bank’s Activities. Case of Unguka Bank LTD

Abstract

Challenges issues that are critical to the growth and health of any profitmaking organization are inherent to the business. To survive, the organization requires going through different stages ranging from creation and sometimes ending by decline. The theory applies to the financial sector as a dynamic industry. In the same perspective the study of the challenges of transformation process from microfinance institution to microfinance bank taking into consideration UNGUKA BANK Ltd focused on describing how these challenges affected the bank’s activities. It applied descriptive research design. Research questions were generated and empirical documents were technically used to expand insight on the existing literature. The data was collected from the UNGUKA BANK Ltd at Headquarter, located in Kigali City. Respondents were 32 and questionnaires have been distributed for the collection of primary data and Statistical Package for Social Sciences (SPSS) was a tool to analyze data. From findings, the study revealed that the major challenges of Unguka Microfinance in the transformation process are mainly related to staff. On one hand, all staff did not contribute to the process of transformation and on the other hand, staffs were not skilled enough in banking operations to drive and sustain the process of transformation. Findings revealed also that benefits of transformation outweigh the challenges encountered on the growth-path of the process of transformation of Unguka Bank Ltd. The study recommends however to the new comers in the transformation journey to pay attention to clear understanding and engaging of the whole staff in the process. To prepare a well trained and highly qualified staff that is computer friendly skilled can be among important steps in transformation process.