Effect of Strategic Change on the Performance of Microfinance Institutions in Nairobi, Kenya

Abstract

The purpose of this research was to investigate the effect of strategic change on the performance of Microfinance Institutions in Nairobi, Kenya, with the goal of addressing two research objectives: to determine the strategic change implemented by Microfinance Institutions in Nairobi, Kenya and establish the effect of strategic change on performance of Microfinance Institutions in Nairobi, Kenya. The study was anchored by transactional cost theory, resource based view and force field theory, explaining the significance of strategic change initiatives on MFIS performance. Also, the research used descriptive design, informed by quantitative research that facilitated the use of questionnaires to collect data from 48 MFIs in Nairobi Kenya. The data was analysed using quantitative and inferential statistics which included mean, standard deviation, correlation and regression.. The study found 73.9% variation in Nairobi MFIs performance to be explained by variation in administrative and technical change initiatives, thus, MFIs performance could be increased by technical and administrative changes. Despite the findings, future research needs to focus on larger area and larger sample, for generalization of findings to all MFIs in Kenya.