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Margret Tembo Many MFIs have a social mission. They may be working, for example, to broaden access to financial services, reduce poverty, empower women, build community solidarity, or promote economic development and regeneration. Social performance, however, refers to the extent of their success in meeting these goals. It is clear from research that most MFIs start with a social motive. However, most of them drift towards financial performance. This phenomenon has contributed to most research interests occurring on financial performance and very little is known on social performance of MFIs and its determinants. The study aimed at establishing the determinants of social performance of MFIs in Kenya. In view of this, the study tried to determine whether the type of regulation, type of institution, network membership, size of the firm and age of the firm have an influence social performance of MFIs.
The overall design of the study was a descriptive and explanatory survey. The population consisted of 34 MFIs registered under AMFI of Kenya as at December 2010 and those with branches in Nairobi. The study was a census and the population existed in different strata. Both primary and secondary data were collected for the purpose of the study. The CERISE questionnaire tool and guide was adopted and modified to fit the Kenyan context. Content validity tests were carried out by the supervisors to test for accuracy and correctness of the instrument and the Cronbach’s alpha test was used to test for reliability of the instrument. A one way linear regression model was employed to test the dependence of social performance on the explanatory variables. Descriptive statistics and inferential statistics were then used to analyse the data. The Analysis of Variance (ANOVA) was used to validate the regression model. One way ANOVA was used to test for significant differences between and within means. The Product Moment Correlation Coefficient (PMCC) was used to measure the correlation between the five independent variables and social performance. The major findings of the study are: that a significant negative relation exists between social performance and age of the firm; size of the firm, type of regulation and network membership all have a positive influence on social performance and that type of institution is insignificant in explaining social performance of MFIs. The study also found significant differences in means among different sizes of firms and that medium size firms have good social performance. The other findings of the study are that MFIs in Kenya have higher depth and outreach to the poor but nevertheless do not contribute to improvement in client’s social and political capital. The results clearly indicate that that startup firms perform better socially than older firms and also that firms subjected to prudential regulation perform better than those not subject to prudential regulation. In addition, it is evident that firms with more international networks perform better socially than those with no networks. Overall, the results show that MFIs in Kenya have good social performance. |
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Last Updated on Wednesday, 23 November 2011 21:31 |
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