The role of individual dimensions of business relationship quality and business customer value in building loyalty in microfinance

Amani Gration Tegambwage () and Pendo Shukrani Kasoga ()
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Amani Gration Tegambwage: The University of Dodoma
Pendo Shukrani Kasoga: The University of Dodoma

Journal of Innovation and Entrepreneurship, 2025, vol. 14, issue 1, 1-19

Abstract: Abstract This study examines the effects of individual dimensions of business relationship quality (BRQ), namely trust, respect, and reciprocity, on business customer value (BCV) and customer loyalty (CL) in the microfinance industry. In addition, the study investigates the mediation effects of BCV on the relationship between the individual dimensions of BRQ and CL. A survey of 509 microenterprises that borrow money from microfinance institutions (MFIs) in Tanzania was conducted. Structural equation modeling was used to analyze the data. Based on the findings, it is concluded that BCV is significantly impacted by respect and trust. BCV, however, is not significantly related to reciprocity. Respect has a positive and significant impact on CL, while trust and reciprocity are not significantly related to CL. Furthermore, the study concludes that CL is positively and significantly impacted by BCV. Regarding the mediation effects, the study concludes that BCV fully mediates the link between trust and CL and partially mediates the link between respect and CL. There is no mediation between reciprocity and CL. The major recommendation of this study is that practitioners and policymakers should establish strategies and policies, respectively, which combine BRQ initiatives such as trust and respect with interventions that increase BCV in order to improve CL. Providing valuable services is difficult if the microentrepreneur is not respected and trusted. CL, in turn, will ensure MFIs’ survival and, hence, foster entrepreneurship development.

Keywords: Microenterprise; Microfinance institution; Business relationship quality; Business customer value; Customer loyalty (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1186/s13731-025-00474-z

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