Consumer Responses to CSR Driven Microfinance Strategy of Banks-An Empirical Investigation Based on India

Saju Jose, Robert Rugimbana, Terry Gatfield


Purpose–There exists only limited research investigating microfinance customers’ reactions on CSR initiatives
of financial institutions. The purpose of this study is to investigate the extent to which the consumers of selected
microfinance institution and some new age banks in India perceive the financial services provided in the context
of well known corporate social responsibility (CSR) principles. It investigates whether consumers of microfinance
under the CSR banner have repurchase intentions and if so why they do that?
Design/methodology/approach–A representative sample of 301 banking customers from ICICI and ABN Amro
Bank located in the state of Tamilnadu and Kerala was recruited through a microfinance institution funded by the
abovementioned banks. The approach of the study was to determine consumer experience and contentment with
regard to the CSR strategy of the banks. A cluster sampling approach was followed, with each State representing a
cluster. The main instrument to survey customers was the Consumer Discontentment Scale (CDS), developed by
Lundstrom and Lamont (1976). The questionnaire was designed to collect the contentment and discontentment of
Findings–Consumers were content with the level of CSR activity. However the research found only a weak link
between contentment and purchase intention. The study seems to suggest that it is not the CSR fit of microfinance
and banks which is bringing rewards in the form of consumer re purchase.
Originality/value–This is the first research examining microfinance customers’ contentment in response to
different CSR initiatives of New Age Banks in India and the potential link between CSR contentment and
purchase intention . It has implications for banks developing microfinance strategies under the CSR banner.

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