EFFECT OF AUTONOMY ON GROWTH OF MICROFINANCE INSTITUTIONS IN MURANG’A COUNTY KENYA
EFFECT OF AUTONOMY ON GROWTH OF MICROFINANCE INSTITUTIONS IN MURANG’A COUNTY KENYA
Dr. Ruth Wanjiku Muriithi - School of Business and Economics, Murang’a University of Technology, Kenya
Dr. Florence Waitherero Kariuki - School of Business and Economics, Murang’a University of Technology, Kenya
ABSTRACT
Microfinance institutions (MFIs) have emerged as crucial players in fostering financial inclusion and economic development in many regions, including Murang’a County, Kenya. Microfinance remains a powerful tool for development since it has made people self-sufficient. In particular, empowerment of vulnerable groups and the inculcation of financial training and discipline amongst the poor will undoubtedly have long-term socioeconomic benefits. This study investigated the effect of staffs’ autonomy on growth of micro finance institutions. Specifically, the extent to which MFIs allow subordinate staff to come up with new ways to enhance customer satisfaction and set independent goals, on the growth of these institutions in Murang’a County. Murang'a County in Kenya serves as an ideal location for this study due to its diverse economic activities and the presence of various microfinance institutions catering to the financial needs of the local population. The study was anchored on Resource Based theory. Questionnaires were used to collect primary data while a data collection sheet was used for secondary data. Data was analyzed using Descriptive statistics and panel regression analysis to establish the relationship between autonomy and growth. Findings show that when autonomy is held constant, growth of microfinance institutions will be 1.625 units. At the same time, increasing autonomy by 1 more unit would lead to an increase in growth by 0.593 units. This implies that the autonomy has a positive relationship with growth of microfinance institutions. The relationship is significant given that p-value=0.000<0.05. The study established that there is a significant positive relationship between autonomy and the growth of MFIs in Murang’a County. MFIs that encourage their staff to innovate and set independent goals experience higher levels of growth. The study highlights the importance of fostering a culture of autonomy within MFIs as a means of achieving sustainable growth. These findings have practical implications for the management and policymakers involved in the microfinance sector in Murang’a County, emphasizing the need to promote autonomy as a strategy for enhancing the growth and impact of MFIs.
