Organizational Capabilities that Can Improve Profitability of Micro-Finance Institutions in Periods of Economic Crisis. Experiences from the Zimbabwe.
- September 10, 2021
- Posted by: rsispostadmin
- Categories: Economics, IJRISS, Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VIII, August 2021 | ISSN 2454–6186
Josphat Nyoni 1, Precious Kwashirai2, Oliver Kapepa3, Linience Tsitsi Charuma4, Andrew Jeremiah5, Martin Dandira6
1,2Women’s University in Africa, Harare, Zimbabwe
3Colonnade Business Leadership School
4Chinhoyi University of Technology, Chinhoyi, Zimbabwe
5,6Namibia University of Science and Technology
Abstract: The main purpose of the study was to explore organizational capabilities that may improve the performance and competitiveness of Micro Finance Institutions (MFIs) operating in economic crisis business environment. The study was conducted using a sample of 43 MFIs in Harare. An explanatory research design was used. A survey in form of a questionnaire was used to collect data. Regression analysis was used to analyze the data. The main findings of the study are that innovative, leaning and strategic capabilities were commonly used by MFIs during the economic crisis. The study noted that the performance of MFIs used in this study was improved mainly by innovative, learning and strategic capabilities. Marketing and integrative capabilities had a weak influence on the profitability of MFIs. The study concluded that by innovative, learning and strategic capabilities are effective for MFIs during periods of economic crisis. It was also noted that MFIs that adopted the right organizational capabilities were useful in reducing poverty among females as well as well as acting as an accessible source of income during the COVID-18 period. This study therefore recommends that efforts be made by the MFIs to invest in the development of innovative, learning and strategic organizational capabilities. The study also recommends that the Government through the central banks take deliberate to efforts to assist MFIs to develop organizational capabilities such as by innovative, learning and strategic capabilities. This can be done by providing financial and technical support for the development of such organizational capabilities.
Type of Paper: Empirical
Keywords: Micro-finance institutions, organisational capabilities
I. INTRODUCTION
1.1 background of the study
Micro-finance is globally referred to as the process of providing a broad range of financial services such as deposits, loans, payment services, money transfers and insurance to the poor and low income households and Small to Medium Business Enterprises (Hudon, Labie, & Szafarz, 2019). Micro financing delivers financial services to poor and low-income households with limited access to formal financial institutions. The main goal of offering such financial services includes helping the poor and low-income clients them raise their income, thereby improving their standard of living. It is therefore a banking model that targets for the underprivileged members of the society (Lopatta & Tchikov 2016).
