2.4. RESEARCH GAP: WHY THIS RESEARCH?
This chapter visited some theories on microfinance and on
human capital. Microfinance is built on principles that seem to be as well
tools for human development because microfinance offers its products to mostly
the poor and has proved that microfinance can sustain itself. Many problems in
microfinance can, however be cited, like the one which is our research's
subject matter (human capital management). Has the above reviewed literature
solved this problem? Or to put it in other words, has the above theory
successfully linked theories on microfinance and the human capital management
issues involved in the management of MFIs? The answer is no. This therefore
sets an opportunity for this research. It is going to link both concepts in the
Rwandan context. However, let us first discuss in the 3rd chapter
the methodology we shall use to get there.
CHAPTER THREE: RESEARCH DESIGN
AND
METHODOLOGY
3.1. INTRODUCTION
This research is mostly more qualitative than quantitative.
This approach allows the exploration of human capital management challenges and
prospects. It enables the research to learn about what people feel in terms of
what they do and what is done for them.
3.2. PROBLEM STATEMENT
The Government of Rwanda is committed to improving the lives
of its population. This would ensure that enrollment in agriculture decreases
from the current 90% to a certain percentage. One of ways to achieve this is to
support the development and sustainability of small and medium enterprises
(SMEs). However, experience shows that these need not big loans, they rather
need micro funds, which calls for the need of serious microfinance
institutions. Indeed, majority of SMEs all not equipped to satisfy the
requirements of classic banking institutions when it comes to loans
requirements, i.e, collateral, etc.
In Rwanda, however, the microfinance movement was crowned with
a bad reputation because clients' deposits proved to be insecure in the 2006
microfinance crisis. The NBR reaction was to close some of them which were
bankrupt. As a result, thousands of clients and several MFI partners were also
affected by the closure. ». Just to name a few, consequences were
employees had to be asked to go home, companies that had given services to them
lost, investors' money was lost, depositors' money was lost, the National Bank
of Rwanda lost because it had to refund depositors, above all, the consumer
confidence in microfinance eroded.
Official information and some research conducted attributed
this crisis to, among other things,
lack of appropriate technical and
managerial skills. Human capital management was a core issue.
It is against
this backdrop that the study on «Human Capital Management in Rwanda:
Challenges
and Prospects for Microfinance Institutions» will be done in
a bid to map progress made so far, challenges encountered and the envisaged
future.
3.3. RESEARCH OBJECTIVES
Research general objective is to investigate challenges and
prospects of MFIs in light of Human Capital management. Specific objectives are
to analyze the capacity of MFIs to attract skillful employees; analyze the
capacity of MFIs to retain skillful employees; and analyze external factors
that influence MFIs' capacity to attract and retain skillful employees.
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