Tag Archives: Mission Drift

Sustainability Dilemmas: Mission Drift and Performance of Microfinance Institutions in Kenya (Published)

Microfinance institutions face a number of dilemmas as they seek to achieve a double bottom line of providing financial services to the poor (outreach) and covering their costs sustainably. Microfinance institutions (MFIs) are therefore a hybrid model but some are also similar to banks because they are regulated and supervised and they mobilize deposits (Counts, 2008). Over the years MFIs have changed dramatically from the initial mission due to increased internal and external pressure to decrease dependence on subsidized or grant funding. Commercialization of microfinance is assumed to be a way of overcoming managerial and efficiency problems, and is thought to promote the large-scale expansion and sustainability. This paper explores the sustainability dilemma in mission drift outcome of commercialization and effect on performance of microfinance institutions. An Explanatory survey was carried out on 351 management staff of the 39 Micro finance Institutions in Kenya. The results of this study inform theory on the extent of application of the double bottom line model by MFIs that critical for achieving sustainability.

Keywords: Mission Drift, Performance of Microfinance Institutions, Sustainability Dilemmas

The Effects of Leadership Characteristics on Microfinance Institutions’ Social Performance in Kenya (Published)

With the growing competition of globalization, strategic decision makers have been faced with the competing interests of external and internal stakeholders such as greater diversity in corporate governance, undertaking more investments in corporate social responsibility and maximizing financial performance. As a result, strategic decision makers today must not only increase their financial performance, but also satisfy the increasing expectations of customers, suppliers and society as a whole. The objective of this study was to examine the effects of the leadership characteristics on the social performance among Kenyan MFIs. It focused on the CEO duality, gender of the CEO, CEO qualifications and experience. This study adopted positivist approach, deductive approach and explanatory research design. Population of the study consisted of all the MFIs registered by the AMFI as at 31st March 2012. Data was analysed using quantitative and qualitative methods. Qualitative data was analysed to yield descriptive, the Independent samples test and the logistic regression. The major findings of the study are: that a significant positive CEO non duality, CEO experience and overall leadership characteristics. The relationship of an MFIs social performance and the gender of the CEO and their education qualification was found to be insignificant. Overall, the results show that MFIs in Kenya can improve their Social performance by improving on their leadership characteristics.

Keywords: CEO duality, Leadership characteristics, Mission Drift, Social Performance Management