Product Innovation and Organizational Performance of Microfinance Institutions in Nairobi City County, Kenya
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Date
2025-05
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International Organization of Scientific Research
Abstract
Microfinance Institutions organizational performance has exhibited rising non-performing loans, reduced asset growth and member dissatisfaction. This study sought to establish the effect of product innovation on organizational performance of microfinance institutions in Nairobi City County with possible recommendations on effective strategies for policy and practical applications to enhance performance of the sector. Four theories guided the study; diffusion of innovation theory, balanced scorecard, transactional cost theory and Schumpeter entrepreneurial innovation theory. Descriptive statistics was used to describe strategic innovation and organizational performance. A total of 205 senior managers from 41 Microfinance institutions headquartered in Nairobi City County consisted part of the target population. The study used 60% of the population to derive a sample of 123. Participants were selected randomly using a systematic sampling process. Structured questionnaire enabled the collection of primary data. Content validity, face and expert validity were used to enhance validity of the instrument. Cronbach alpha enabled the analysis of the instrument’s reliability with 0.7 considered as the thresh hold and acceptable reliability value. Pilot study was done in Kiambu County targeting four microfinance institutions with 14 respondents. Descriptive statistics, Karl Pearson correlation and multiple linear regression aided the analysis of primary data. The findings were presented in tabular format, graphs and charts. Confidentially, anonymity and consent guided the research process. The results showed that product innovation significantly improved organizational performance of microfinance institutions in Nairobi City County. The study concluded that microfinance institutions may need to adopt product innovation to meet the needs of their customers thereby improve organizational performance. The study made recommendations that product innovation may be used to tap into new markets, meet emerging customer preferences and increase sales
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Here’s the correct **APA 7th edition citation** for that article: **Mwaura, J. R., & Waithaka, P. (2025).** Product innovation and organizational performance of microfinance institutions in Nairobi City County, Kenya. *IOSR ), 27*(5, Ser. 7), 13–20. [https://www.iosrjournals.org/iosr-jbm/papers/Vol27-issue5/Ser-7/B2705071320.pdf)