Influence of Learning as an Outcome of Transformational Leadership on Performance of Staff of Kenyan Microfinance Institutions
Abstract
Microfinance is a key sector in economic growth. This is mainly because it targets the unbanked and marginalized people especially in the rural areas and thus has direct impact on poverty eradication. As a concept, microfinance has been accepted across the globe as a forum within which poverty can be eradicated and financial inclusion extended. However various challenges define microfinance today and present a leadership challenge that needs to be tackled for the sector to improve and deliver its mandate. The study examined the influence of leaning as an outcome of transformational leadership on performance of staff of Kenyan microfinance institutions. This research is key to Kenyan government as it supports to come up with a clear framework for regulation of microfinance sector and offer leadership in the entire financial sector. The study targeted institutions that were engaged in retail microfinance and that are members of Kenyan Firm of Microfinance Institutions (AMFI). Primary data was collected from the respondents whereas secondary data was obtained from AMFI on performance of institutions. Analysis of unit was staff in microfinance institutions that were categorized in to three: the senior management with whom an in-depth interview was conducted, middle level manager and the other staff who participated in daily activities of microfinance who were involved in a self-administered questionnaire. Performance was assessed through the load that microfinance officers carry in terms of the outstanding loan balance, the number of customers that individuals in the organization have as well as the portfolio quality and turnover rates within the organizations. Stratified sampling technique was used to obtain sample and sample size determined using the Cochran’s formula to be 385 which was large enough to allow generalization. Descriptive approach used the pragmatic approach. A pilot study was carried out in Embu County to test data reliability of the data gathering tools. Data analysis was done using SPSS. A multiple linear regression model that reflects relationship amongst factors was generated to reflect the extent that variables influence performance. The findings indicate that learning has positive correlation with staff performance in microfinance institution. The regression results revealed that learning has a positive and significant relationship with staff performance in microfinance institution. The study rejected the null hypothesis and concluded that learning influenced their performance in micro-finance institutions in Kenya. The study concluded that learning as an outcome of transformational leadership had a positive and significant relationship to staff performance in micro-finance institutions in Kenya. The study recommends that learning in micro-finance institutions should be associated with very high self-evaluation that is characterized by high self-realize, efficacy and high control locus and stability in emotions in order to foster commitment within the institution.
Keywords: Learning, Transformational Leadership, Staff Performance, Microfinance Institutions in Kenya.
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