| dc.description.abstract | The purpose of this study was to establish how deposit-taking microfinance
institutions in Kenya apply Porter’s Diamond Model to gain competitiveness in the
global market. The study was guided by only one objective. In order to meet the
objective, this study adopted a descriptive cross-sectional survey design. The
population of this study comprised all deposit-taking microfinance institutions in
Nairobi County. As at July 2014, there were 12 licensed deposit-taking microfinance
institutions. The 12 institutions were all selected as a judgmental sample because a
population of 12 is small and therefore could not be sampled meaningfully. Both
primary and secondary data were collected. Primary data was collected directly from
the respondents in the population of the study. The key respondents were the senior
management team including the Managing Director, Finance Manager and Marketing
Manager, with the Human Resources Manager as the contact person. A questionnaire
was used to gather the information from the respondents. Sources of secondary data
included the firm’s intranet, journals, daily reports or papers, brochures, policy
documents and other documents that were available in the registries which provided
valuable information to the study. Based on the findings of the study, it is clear that
factors that influenced competitiveness in deposit-taking microfinance institutions
were to a very great extent capital, infrastructure, demand for services, internal
competition, taxes and government regulations. The findings also revealed that
performance was greatly influenced by years of operation but not adversely affected
by competition from cheaper service providers, lack of research and development, a
firm’s physical location or clustering. The key challenges that firms faced were lack
of proper regulation, competition from mainstream banks, high capital outlay, and
poor infrastructure. This study concluded that performance among players in the
microfinance industry in Kenya was affected by lack of funds, poor roads and
infrastructure, low demand for services, competition from local rivals, high taxes and
government policies and regulations. The institutions also indicated that performance
was not seriously affected by competition from cheaper service providers or lack of
research on improvements in the industry | en_US |
