The Effects of Technological Innovations on the Financial Performance of the Micro Finance Institutions in Kenya

Abstract

The study was undertaken to investigate the effects of Technological innovations on the performance of micro finance institutions in Kenya.It considered variables such as Effect of technological innovations on the target group, How technology improves staff performance, Technological Changes in organizations. Technological adoption in all departments and how legislation affects implementation of technology. The problem statement therefore indicates that, micro finance institutions face myriad of challenges such as slow introduction of systems that enable institutions to analyse their loan portfolio and produce reports which facilitate appropriate decision making, this has led to low adoption of change created by IT solutions and regulatory constraints that impede MFI ability to implement strategic IT solutions and to staff the IT functions within. The study therefore unearth issues that affect adoption of technology in enhancing performance and the remedial measures for the improvement of performance. The study was de limited with biasness in some occasion by the respondents and former opinion during the administration of the questionaires.Literature was reviewed under different sub themes,and the study adopted theoretical and conceptual framework which helped the researcher to define the variables. Descriptive statistics, cross tabulation and case referencing was used. Sample of 54 Micro finance institutions were identified of which 20 were interviewed randomly using appropriate scientific methods. This study could be carried out to establish areas of technological opportunities that exist for microfinance institutions to consolidate and enjoy economies. of scale through joint ventures, partnerships, mergers and so forth that can be utilized to enhance growth.