| dc.description.abstract | Micro-Finance Institutions in Nairobi County have experienced intense pressure to adapt to
new developments during the past ten years because of market rivalry, advancements in
computer technologies, and varying employee demographics. Micro-Finance Institutions
that do not innovate run the risk of being surpassed by rivals. The financial sector has been
affected by globalization and technological advancement. Locally in Kenya the
performance of MFIs has declined. The study's objective was to define the process
innovation effects on the financial performance of microfinance institutions in Nairobi
County, Kenya. The process innovation variables used were remote data processing, digital
cards, point-of-sale terminals, real-time gross settlement, and their effects on the financial
performance of MFIs. Task-technology fit theory, diffusion of innovation theory, and
theory of financial innovation are the theories on which the study is based. Cross-sectional
survey research approach was em`1ployed. The current study concentrated on the head
employees of finance, information technology, operations, and credit control from 12 MFIs
in Nairobi County that are registered with AMFI. Stratified random sample technique was
used. An initial sample of 44 individuals was selected using the Yamane statistical
technique. Structured questionnaires were used to gather in-depth data. Pre-testing was
conducted to assess validity and reliability of the data collection techniques. Version 26 of
the SPSS was used to evaluate the data and guarantee its accuracy. Mean and standard
deviation were used to determine descriptive analysis, whereas model brief, ANOVA, and
coefficients of regression were used to determine regression analysis. According to the
correlation analysis, real-time gross settlement, digital cards, point-of-sale terminals, and
remote data processing were all positively correlated with financial performance. The
outcomes of the regression showed that every predictor had a favourable, significant effect
on financial success. The research concluded that the processes of the MFI have been
automated to improve MFIs operations. The study concludes that digital cards introduction
in to the Microfinance institutions has attracted more retail depositors to the MFIs. Also
the Microfinance institution offers debit cards to its customers. Further, it is concluded that
the MFI has sufficient POS infrastructure and the MFIs have put in place security
measures on point of sale transactions. The study concludes that the Microfinance
institution uses Real time gross settlement to minimize risk related to high value payment
settlements. The findings of the study endorsed that in addition to automating core
processes, the Microfinance institutions should make it possible for the clients to open and
operate accounts remotely. In order to ensure maximum benefits through digital cards use,
the Microfinance institution should encourage their customers to use digital cards. | en_US |
