Co-production in Business Counselling in Microfinance Setting: An Empirical Study in Sri Lanka.

Abstract

Recent advancements in service literature highlight the importance of coproduction between the firm and the client in value creation within the domain of microfinance provisioning. The objective of this study is to investigate the concept of co-production in business counselling in a microfinance setting and to formulate a conceptual framework. The paper develops a conceptual model identifying the factors facilitating co-production in business counselling between Counsellors and Owner-Managers. The multiple case study method was used, and 30 in-depth interviews were conducted with counsellors and owner-managers involved in the process. Findings revealed that Micro Finance Institutions’ (MFIs) counsellors and owner-managers of Micro and Small Enterprises (MSEs) coproduce in business counselling, generating outcomes that help them improve their performance. The results show that factors such as counsellor-ownermanager expertise, counsellor readiness, follow-up by the counsellor, ownermanager willingness, counsellor-owner-manager communication, and counsellorowner-manager interpersonal relationships enhance co-production in counselling. Findings further revealed that several contextual factors, such as social mobilization programmes, types of linkage, types of MFI, and lending methodology, influence co-production in counselling. The results further show that MFIs could achieve co-production outcomes such as the number of employments generated, and the number of businesses created. In contrast, owner-managers could experience higher profits and sales