Influence of Strategic Leadership on Performance of Micro-finance Institutions in Nairobi County, Kenya

Abstract

The study’s aim was to examine the influence of strategic leadership on performance of micro-finance institutions in Nairobi County, Kenya. Specifically, the study examined the correlation between strategic leadership and performance of MFIs in Nairobi County, Kenya. The0study was based on Upper echelon theory and Contingency theory. The target population was forty-six (46) microfinance institutions registered as members of AMFI in Nairobi County. Explanatory and cross-sectional research design was adopted. Close ended questionnaires were used to collect primary data. The study adopted mixed data analysis method, inferential and descriptive analysis were performed. The collected quantitative data was0analysed using descriptive statistics techniques. Data analysis focused on demographic information analysis, descriptive statistics and inferential statistics.0The study showed that the leaders set clear objectives for the organization and the organization leadership ensures that employees work towards achieving set goals. The organization’s vision, mission, goals, objectives and strategies were communicated to all employees and the strategic objectives of the MFI aligned with mission and vision statement. Leaders ensured executed performance strategies were evaluated post implementation and also assessed the strengths, 0weaknesses, opportunities, and0threats in order to enhance understanding of the prevailing business climate. Formulation of strategy execution approach resulted to increase in profitability hence an increase in return on assets. Adoption of strategic leadership styles improved sales hence revenue and profitability. SWOT analysis resulted to an increase in market share and return on investment grew due to clarity of organizational objective. The study established that strategic leadership0had a strong positive correlation, positive influence and significant with/on performance of MFIs. A unit increase in strategic leadership led to an increase in performance of MFIs in Nairobi County, Kenya. The study concluded0that0strategic leadership is positively related to performance of MFIs in Nairobi County, Kenya. The study’s recommendation was that organizational0leaders ought to ensure a shared powerful vision to provide direction and ensure sustenance of the transformation process to create the future. Further, there was need for strategic control measures to enable strategic0plans put in place by the organizations become a reality and hence imperative that Boards of directors and senior management team recognize the intended reality.