| dc.description.abstract | The Microfinance industry is a sector that is increasingly getting attention due to the role it
plays in poverty alleviation. This study focused on a key aspect in the operations of
Microfinance institutions: New product development. The objectives of the study were as
follows: to determine the methods MFls are using in new product development, to identify
the motivating factors in new product development and to find out the problems they
encounter when developing new products. This was a census where 37 institutions operating
in Nairobi were targeted. Out of this number, 21 institutions representing 56% of the
population responded to the questionnaire used in the study.
The limitation experienced during this study included the inability to reach as many Chief
Executive Officers as possible. These executives are known to have a deeper understanding
of their organizations and could have given more accurate information. This led to the
replacement of the respondents with other managers in the same institution. Time constraints
did not only lead to the inability to carry out the research in the entire country but also made
it impossible for the researcher to spare more time for the respondents who had not responded
within the period allocated for the exercise.
The main findings u" the study were that MFls in Nairobi use the parallel approach more in
new product development than the sequential method. it also emerged that MFls are
motivated by various factors in developing new products. These factors included: demand,
growth and expansion, utilization of excess resources, competition, poverty. alleviation, and
change of strategy. The problems MFls encounter in product development were found to be
varied. Some of the problems identified were: financial difficulties, marketing problems, poor
economy and lack of a legal framework. The study recommends that the Microfinance Bill
pending in parliament be passed at the earliest opportunity to provide guidance in the sector
and that Microfinace institutions consider joining AMFI and also invest in a marketing
department in their organization structures. The need for a similar research to be conducted
among institutions outside Nairobi is therefore proposed to enable a complete understanding
of the sector in Kenya | en |
