Abstract: Increased competition and associated deterioration of lending portfolios are growing concerns that face micro finance institutions (MFIs) in Kenya. Some micro finance experts have expressed frustration regarding the subsequent upward trend in defaults and over indebtedness that are inhibiting growth of the MFIs. The study adopted a descriptive research design and a sample of 39 respondents was taken out of the target population of 62 respondents using stratified random sampling technique. Questionnaire was used to obtain data. Descriptive and inferential data analysis was done. All the null hypothesis were rejected and alternative hypotheses accepted. The study revealed that customers are the main players in the success of MFIs in Kenya. Regression results showed that customer orientation was significant with F-value=21.65, at p-value=0.000<0.05, physical facilities with F-value=8.264, p-value=0.000<0.05, technology adoption with F-value=9.035, p-value =0.000<0.05 and legal framework with F-value=33.842, p-value =0.000<0.05. Overall, all the variables investigated had a statistically significant influence on performance of MFIs in the study area. However, there are other factors that explain the variability of the financial performance in small businesses in Kenya that were not included in the model.
Keywords: (Customer orientation, Physical facilities, Technology, Legal framework, performance).
Title: DETERMINANTS OF PERFORMANCE OF MICROFINANCE INSTITUTIONS IN NYAHURURU SUB-COUNTY, KENYA
Author: Richard S. Mbithi, James N. Kung’u, Zakayo Onyiego
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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