STRATEGY EVALUATION AND ORGANIZATIONAL PERFORMANCE OF MICRO-FINANCE INSTITUTIONS IN NAIROBI CITY COUNTY, KENYA

Rachel Kamuya, Dr. Elizabeth Kimani

Abstract


The microfinance sector in Kenya has faced significant challenges, with performance marked by persistent losses and rising non-performing loans, though it showed resilience amid economic shocks. In 2019, the sector-maintained stability despite global economic slowdowns, with 14 microfinance institutions (MFIs) operating by 2021, up from three in 2010. The main objective of the study was to investigate the effect of Strategy evaluation on organization performance of microfinance institutions in Nairobi City County, Kenya. The study was based on Strategic choice theory.  The study methodology comprised of a descriptive research design, a target population of 178 middle and senior management employees of MFIs based in Nairobi City County, Kenya. Through a random sampling technique, the study used Yamanes formulae to obtain a sample size of 123 employees. The study collected primary data through likert scale structured questionnaires through a drop and pick method. A pilot study was carried out at KWFT headquarters and data used for reliability and validity of research instruments. Data was analysed using inferential and descriptive techniques based on a multiple linear regression model with the aid of SPSS version 25. Based on the study findings, its concluded that; strategic management has a positive significant influence on the organizational performance of microfinance institutions in Nairobi City County, Kenya. Based on the findings, strategy evaluation had the highest substantial positive influence on performance. Regular evaluation allows managers to assess whether strategic initiatives are meeting their objectives and delivering expected results. To enhance this process, MFIs should develop key performance indicators (KPIs) and benchmark their progress against both internal goals and industry standards.

Key Words: Strategic Management Processes, Performance, Micro-Finance Institutions, Strategy Evaluation


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