Browsing by Author "Cheteka, Christine Bukokhe"

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    Financial Inclusion Strategies and Profitability of Microfinance Banks in Nairobi City County, Kenya
    (2025-12) Cheteka, Christine Bukokhe
    Profitability in Kenya’s microfinance banking sector has faced persistent challenges, with many institutions in Nairobi City County recording financial losses despite expanding outreach to underserved populations. Existing studies have largely examined operational and institutional factors, leaving limited empirical evidence on how financial inclusion strategies relate to profitability. This study examined how financial inclusion strategies affect the profitability of microfinance banks in Nairobi City County. Specifically, the study examined how digital financial services, group lending models, and financial literacy programs influence the profitability of microfinance banks. Guided by financial intermediation theory, the group lending model, financial literacy theory, and profit maximization theory, the study explored how the three financial inclusion strategies—digital financial services, group lending mechanisms, and financial literacy initiatives—relate to institutional performance. An explanatory research design was adopted, targeting 14 licensed microfinance banks in Nairobi City County. Primary data were obtained using structured questionnaires, while secondary data were drawn from audited financial statements covering the period 2016–2024. Data analysis involved descriptive statistics, correlation, and multiple regression, supported by relevant diagnostic tests. The findings revealed that digital financial services, group lending models, and financial literacy programs each contributed positively to profitability by improving operational efficiency, strengthening repayment behavior, and enhancing clients’ financial capability. The study concludes that financial inclusion strategies play a significant role in supporting the financial sustainability of microfinance banks. It recommends strengthening digital infrastructure, improving the structure and monitoring of group lending practices, and institutionalizing financial literacy programs to ensure that financial inclusion efforts translate into sustained profitability.