Responses of micro finance institutions in Kenya to the turbulent business environment
Abstract
Environmental changes have serious economic effects and are of great concern for organizations
that would wish to be ahead of competition. Environmental forces affect the types of products
developed, the nature of positioning and market segmentation strategies, the types of services
offered, and the choice of business to acquire or sell. The study sought to gain a better
understanding of the responses of MFIs to the challenges emanating from the turbulent business
environment that affect MFIs, both positively and negatively and the factors that influence these
responses, which are critical to their outreach and sustainability.
The focus of the study were the MFIs that are registered members of the Association of Micro
Finance Institutions (AMFI). By June 2006, AMFI had a total membership of 17 Micro Finance
Institutions and the researcher undertook census survey of all the 17 MFIs . Responses to
various issues of concern were collected through structured questionnaires, which were
administered to the MFIs in Nairobi and its environs by hand delivery and picked up on
completion. Further, the researcher conducted a comprehensive literature review of materials
relevant to the study, whose sources included various web sites, books, journals and local daily
newspapers and reports obtained from the various MFIs.
Out of the 17 questionnaires sent out, 16 were returned completed, a 94 per cent response rate.
The information gathered was analyzed using the Statistical Package for Social Science (SPSS),
presented and discussed as per the objectives and research questions of the study.
Findings of the study indicate that environmental changes indeed have serious economic effects
and are of great concern for organizations that would wish to be ahead of competition. If ignored,
the changes in the environment can ultimately compromise an MFI's operations, profitability,
and long-term viability. Thus, MFIs, like other types of businesses, must perform some critical
analysis and planning to mitigate the impact that the changes have both on the MFIs target
market and on their own operations.
Citation
Masters of business administrationSponsorhip
University of NairobiPublisher
school of Business, University of Nairobi