Strategic management determinants of corporate growth in selected Micro-Finance institutions in Kenya

Abstract

The main purpose of this study is to assess the strategic management determinants of corporate growth of Microfinance Institutions (MFIs) in Kenya. The specific objectives of the study will be to assess the effects of grand strategy on the growth of MFIs in Kenya; to assess the effects of corporate vision on the growth of MFIs in Kenya; to establish the effects of cost leadership strategy on the growth of MFIs in Kenya; to evaluate the effects of product differentiation strategy on the growth of MFIs in Kenya; to establish the effects of pooling of strategic resources on the growth of MFIs in Kenya; and to assess the effects of strategic synergy on the growth of MFIs in Kenya. The depended variable is corporate growth which will be measured by corporate profitability, market share, entry of new customers, rate of loan recovery, branch network, number of employees, and social impact. The research scope will be the MFIs which have operations in Mombasa County, and which are five years of age and above as of 31st December 2012 and their regulators (AMFI and CBK). Five years is a period enough to establish a stable growth pattern for MFIs. Descriptive and quantitative research designs will be employed. In a population of 57 firms, 32 will be studied. Both stratified sampling and purposive sampling methods will be used to identify the sample size. Stratified sampling method will assist in categorizing the population into four categories, and subsequently purposive sampling technique will then be engaged to assist the researcher to identify the sample MFIs with specific characteristics under study. The primary data collection instruments will be structured and semi structured questionnaires on strategic management determinants. Secondary data collection will involve data mining from company records. Pilot testing will be conducted in four MFIs in Mombasa CBD to test the data instruments. Cronbach alpha tool will be employed in testing the data reliability and validity. If the calculated value will be 7.0 and above, the internal consistency will be strong, thus acceptable. Data Triangulation will be deployed to triangulate responses from the MFIs, the regulators and the data mined from company records. Data will be analyzed using SPSS version 20. The hypothesis will be tested using t-test at 95% confidence level. The Tobit Model will be deployed to estimate the final linear relationship between strategic management determinants and corporate growth. Data will be presented in tables, graphs and pie charts.