The determinants of transformation of micro-finance institutions into deposit taking MFIs in Kenya
The purpose of this study was to determine the determinants of transformation of non-deposit taking Micro Finance Institutions in Kenya into deposit taking micro-finance institutions. The study specifically sought to find out the effect of commercialization, self-sustainability and automation of customer products and services on the transformation process. The research design used was descriptive survey study. A census of 46 MFIs in Kenya, excluding banks and insurance institutions were surveyed from the target population and 36 of them responded. The researcher used primary data which was obtained through self-administered questionnaires with closed and open-ended questions. SPSS was used to perform the analysis as it aided in organizing and summarizing the data. The analyzed data was presented in tables, charts and graphs including frequency percentages. The study established that the three determinants; commercialization, self-sustainability and automation of customer products and services have a significant effect on the transformation of MFIs, with self-sustainability as the strongest determinant of transformation of MFIs. The study recommended that there should be adequate motivation for Micro Finance Institutions to operate at most convenient environment for them and to promote their transformation.