ABSTRACT

This study examines the causes of client dropout and its implications at Ntarikon Credit Union in Buea, Cameroon. Credit unions, which serve as a vital source of financial services for low and middle-income individuals, play a crucial role in promoting financial inclusion. However, client retention remains a challenge for many credit unions, including Ntarikon Credit Union. Client dropout refers to the phenomenon where clients discontinue using the services provided by a financial institution, which can have significant implications for both the credit union and the broader community.

The objective of this research is to identify the key factors leading to client dropout at Ntarikon Credit Union, assess the impact of this dropout on the institution, and propose strategies to improve client retention. This study uses both qualitative and quantitative methods, including client surveys, interviews with credit union staff, and analysis of membership and financial records.

The research reveals several major causes of client dropout at Ntarikon Credit Union. First, dissatisfaction with service delivery was identified as a significant factor. Many clients expressed concerns about slow transaction processing, long wait times at the credit union’s office, and poor customer service. These issues diminished clients’ confidence in the institution, prompting them to seek alternatives. Another factor contributing to dropout was the lack of transparency regarding loan terms and conditions. Some clients reported feeling misled about interest rates, repayment schedules, and penalties, leading to frustration and a sense of mistrust toward the institution.

Additionally, the study found that economic hardships also played a role in client dropout. Many clients faced financial difficulties that made it challenging for them to meet their loan repayment obligations, resulting in defaulting on loans and ultimately dropping out of the credit union. The credit union’s strict policies on loan default and penalties, coupled with a lack of flexibility in restructuring loans, further pushed clients to disengage from the institution. The rising cost of living and unstable income levels in Buea exacerbated these financial challenges for clients.

Furthermore, the introduction of new financial institutions and digital financial services in the Buea area has increased competition for Ntarikon Credit Union. Many clients, particularly younger and tech-savvy individuals, preferred the convenience and speed offered by mobile banking platforms and fintech solutions, leading to a gradual shift away from traditional credit unions. Ntarikon Credit Union’s slow adoption of digital services put it at a disadvantage compared to its competitors, who offered clients easier access to their accounts and transactions via mobile applications.

The implications of client dropout are significant for Ntarikon Credit Union. Financially, the loss of clients leads to reduced deposits, lower loan uptake, and diminished interest income. This weakens the credit union’s ability to fund new loans, invest in improvements, or maintain operational sustainability. Additionally, a shrinking client base impacts the credit union’s reputation within the community, as clients leaving the institution may share negative experiences with others, discouraging potential new members from joining. Over time, this can lead to a cycle of reduced membership and further financial strain.

On a broader scale, client dropout from Ntarikon Credit Union also affects the community it serves. Credit unions like Ntarikon play a critical role in promoting financial literacy, offering affordable loans, and fostering a savings culture. As clients drop out, fewer people benefit from these services, which can lead to greater financial exclusion in the region, particularly for low-income households who rely on the credit union for financial support. This can also limit access to credit for small businesses, thereby stunting local economic development.

The study concludes with recommendations aimed at reducing client dropout and improving retention at Ntarikon Credit Union. The primary recommendation is for the credit union to enhance its service delivery by improving staff training on customer service, reducing transaction wait times, and increasing transparency in loan terms. Additionally, the credit union should consider adopting more flexible loan repayment options to accommodate clients facing economic difficulties. This includes offering loan restructuring options and reducing penalties for clients who temporarily struggle with repayments.

Moreover, the credit union should invest in digital transformation by introducing mobile banking services that offer clients easy access to their accounts and transactions. This will not only improve client satisfaction but also attract younger clients who prefer digital solutions. Finally, the credit union should strengthen its community outreach programs to rebuild trust and emphasize the benefits of being a member. By addressing the root causes of client dropout and enhancing its service offerings, Ntarikon Credit Union can improve client retention, maintain financial stability, and continue to serve as a pillar of financial inclusion in the community.

Keywords: client dropout, financial services, credit union, customer service, loan repayment, digital banking, financial inclusion, Ntarikon Credit Union.