Assessing the Potential of Applying Lean Six sigma in Microfinance Institutions in Palestine and its Impact on employee satisfaction: FATEN as a Case Study

Abstract

The emergence of microfinance institutions (MFIs) in the Palestinian Territories (PT) has become one of the basic tenets of the financial industry. Palestinian MFIs meanwhile work under the supervision of the Palestinian Monetary Authority (PMA). the need to improve and develop the microfinance sector is becoming more and more relevant to all financial sector participants. MFIs in PT have one principal financial activity, which is granting loans without providing other activities like taking deposits, transfers, money exchange, etc. MFIs in PA are an essential part of the Palestinian financial and economic system, as they have an important role in many economic indicators, sustainable economic development, and they are pushing the growth process forward. As a service sector that offers loan services to Palestinians to support the sustainability of their businesses, MFIs should work on the continuous improvements of their processes as the Palestinian context has its unique particularity represented by high rates of unemployment and poverty. More specifically, having effective and efficient processes in MFIs through applying different tools of lean management and waste reduction would improve the quality, reduce the cost and ultimately guarantee the sustainability of MFIs and their customer satisfaction. To this end, the potential of applying lean management tools in the micro-financing sector in Palestine is investigated in this study. More specifically, a case study on one of the leading MFIs in Palestine, which is Palestine for Credit and Development - (FATEN) is considered for assessing the potential of applying the lean management tools in its operations. Accordingly, a questionnaire was designed and distributed to a random sample of 187 employees working in FATEN. the results showed that it is possible to apply lean management tools in FATEN and this applies to competing institutions, as it generally has a positive XIII relationship with employee satisfaction as well. Thus, managers of financial institutions have to consider the application of lean management tools in their organizations to increase the quality of services provided and raise employee satisfaction, as it also requires the allocation of resources, and therefore, the senior management must take responsibility for implementing the tools of lean management and addressing the obstacles and limitations that hinder applying these tools.