The Mediating Effect of Financial Management Practices on the Relationship between Microfinance Financial Services and Socioeconomic Performance of Households: An Explanatory Sequential Approach

Abstract

Household socioeconomic performance assessment of microfinance recipients is vital in ensuring effective and beneficial programs, informed policies, and improved lives. This study aimed to determine the mediating effect of financial management practices (FMP) on the relationship between microfinance financial services (MFS) and household socioeconomic performance (HSP) of microfinance recipients in Region XI. Employing the explanatory sequential QUAN-QUAL mixed methods, purposive sampling with snowball sampling, and thematic analysis, data were obtained from 400 respondents in Region XI.  Medgraph was utilized to determine the mediating effect of FMP on the relationship between MFS and HSP, which was found to be a significant partial mediation in this study. Through interviews and focus group discussions, data were integrated with the findings in the quantitative aspect of the study. The participants confirmed the variables' relationships and functions in the mediation model. With the confirmation, it can be stated that there is substantial evidence that financial management practices are one of the reasons microfinance financial services can influence the household socioeconomic performance of microfinance recipients in Region XI, as demonstrated in the partial mediation model.