Perceived Information Technology Integration And Performance Of Microfinance Institutions In Kenya

Abstract

The study examined perceived information technology integration and performance of microfinance institutions in Kenya. Particularly the study sought to provide answers to the question: What is the level of IT integration of information technology into business functions of microfinance institutions in Kenya? What is the relationship between IT integration and performance of microfinance institutions in Kenya? The study utilized resource based theory, technological acceptance model (TAM) and strategic alignment theory in how IT integration influences performance of microfinance institutions. A descriptive research design was used with a population of the study being the managers of microfinance institutions in Kenya. According to Central Bank of Kenya (2018), there are 13 Microfinance institutions operating in Kenya and all of them participated hence the study was a census. The study used primary data which was collected using questionnaires. Data were analyzed using frequencies, percentages, mean, standard deviation and regression analysis. The study achieved a response rate of 92.3% making the data adequate for analysis. The findings showed that IT integration enhances performance of microfinance institutions. Specifically, microfinance institutions have mostly integrated IT in Finance management, marketing management and human resource departments. Further findings showed that there is adequate skill in the microfinance institutions to effectively use IT resources and adequate technical skills to formulate effective IT solutions in the institution. The study also revealed IT integration has contributed to increased profits, increased operational efficiency and increased market share in the microfinance institutions. The study recommends the MFIs to increase the level of IT integration in all departments to improve customer, supplier and internal processes needs therefor enhancing the overall performance of the institutions