Strategy, Competitive Advantage and Performance of Financial Institutions That Offer Mobile Loans Services in Kenya

Abstract

The aim of this study was to establish the strategies employed by the financial institutions offering mobile loans services and its influence on the performance. The Target population was 15 financial institutions in Kenya. The study used a census because of the relatively low population size of the targeted respondents. All the 15 respondents participated in the study, Out of the 15 respondents, 10 respondents completed and returned the questionnaires, translating to 66.67% response rate. A structured questionnaire was used as an instrument for data collection. Both descriptive and inferential statistics were used to analyse the data. Descriptive statistics such as frequencies, means, percentages and standard deviations were used. Inferential statistics such as regression and correlation analysis was used to analyse the relationship between the study variables. The analysed data was presented in form of frequency tables and pie charts. The study found out that strategies adopted in the financial institutions are essential in the performance of the financial institutions offering mobile loans services. The strategies that were adopted in the financial institutions offering mobile loans services were innovation strategies, product value strategies, cost and differentiation strategies. It was established that financial institutions offering mobile loans institutions have been able to adopt the strategies at a relatively large extent in their operation but in several ways that has enhanced their performance, through reduction of the costs of operations, enhancement of profitability, competitiveness and sustainability in the industry. The study further found out that through the strategies the firms have been able to attain customer growth, increased profitability, expansion of the market share and increase in customer satisfaction levels. The study recommends that the financial institutions offering mobile loans services should regularly evaluate their external environment in order to ensure the appropriate strategies are adopted in the organization. It was finally recommended that another study to be done on the related study, should investigate how organizational factors influence the strategies which was not the concern of this study and the need to distinguish the characteristics of the firms such as total assets, market share and organizational structure in order to look on how different groups adopt different strategies in the market.