dc.description.abstract | The purpose of this study was to identify the strategies adopted by licensed microfinance
institutions in Kenya in the light of a rapidly changing, volatile and highly competitive
environment. Specifically, the study will establish the challenges MFIs face from their
external environment in Kenya as well as identifying the strategic responses by MFIs to
the environmental changes in Kenya. The research design was a descriptive survey to
assist the researcher to identify the strategic responses used by the MFIs where the target
population comprised of the six licensed deposit taking microfinance institutions in
Kenya. These are Faulu Kenya, Rafiki, Uwezo, Kenya Women Finance Trust, Smep and
Remu. The study collected data by use of questionnaire. The questionnaire was divided
into two main sections. The first section aimed at gathering the general background
information. The second section covered the strategic responses and environmental
changes of microfinance institutions. The collected data was analyzed using descriptive
statistics. This involved the use of frequency tables, percentages, rank ordering and mean
scores. Frequency tables were used for arraying data obtained to facilitate working out
percentages in order to address the objective of the study. From the study, most of
microfinance institutions operate as partnerships. An organization entering into the
financial industry is subject to various advantages like credit facilities from already
established institutions. On the other hand however, there are many risks that come along
as the organization expands for example bankruptcy, members leaving to join other
upcoming institutions and even high advertisement costs due to high competition. This
therefore calls for the need to operate as a limited company so that the liabilities will be
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limited or as partnership so as to share the risk when it occurs. As part of
recommendation, the government should impose favourable policies to enable the
microfinance institutions in the Kenya to compete effectively so that they can continue
with their operation. This in turn increases employment opportunities which improve
economic development. Microfinance institutions should adopt strategies that will
improve their performance and enable them to compete effectively in the industry. Goals
and objectives should also be set by the microfinance institutions. This will enable them
asses their performance whether they are growing, stagnating or deteriorating. | en_US |