CRITICAL SUCCESS FACTORS ON TURNAROUND STRATEGY OF MICROFINANCE INSTITUTIONS IN KENYA
Microfinance Institutions are pillars to development of small businesses and growth of the informal sector in Kenya. Many MFIs started their operations as program activities for Non-governmental organizations whose funding has continued to decline with time. The pressure to become sustainable has further driven the entities to develop turnaround strategies to achieve sustainability. The general objective of the study was to investigate the critical success factors on turnaround strategy of MFIs in Kenya. Descriptive design was adopted for it met the objectives of the study. Secondary data was also employed through use of current publications, reports to provide background of the study and supplement the primary data received from interviews. The findings of the study indicate that MFIs pursue turnaround strategy due to pressure from shareholders, lenders and donors for profitability, competition from the market, the need to remain competitive on technology and innovations front, pressure to transform to regulated institutions to gain public confidence, increase market share and changes in customer preferences. The study found that the following are critical success factors of a turnaround strategy of MFIs in Kenya; affordable capital, public confidence, skilled staff, branch network, competent managent,composition of board expertise, use of modern technology and use of diversified and innovative products that meet dynamic needs of the clients.
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