SOCIAL ENTREPRENEURSHIP AND FINANCIAL PERFORMANCE OF REGULATED MICROFINANCE INSTITUTIONS IN KENYA
Abstract
Purpose of the Study: The purpose of the study was to establish the influence of social entrepreneurship on the financial performance of regulated microfinance institutions in Kenya.
Statement of the Problem: Microfinance Institutions (MFIs) in Kenya play a crucial role in providing financial services to underserved populations but face challenges in balancing financial and social sustainability. The integration of social entrepreneurship presents both opportunities and challenges for MFIs in achieving social impact.
Research Methodology: Descriptive and correlational research designs were adopted. The target population comprised 265 MFI managers and heads of departments, while the sample size of 160 was determined using Slovin's formula.
Findings: The descriptive results revealed strong support for social entrepreneurship, reflecting MFIs' commitment to social impact. Positive correlations suggest social entrepreneurship contributes to improved financial performance outcomes. The findings indicate MFIs should prioritize social entrepreneurship by fostering community engagement, financial inclusivity, and socially responsible products.
Conclusion: The study concludes that social entrepreneurship significantly contributes to MFIs' overall financial performance by strengthening customer trust, client relationships, and loan repayment rates.
Recommendation: It is recommended that MFIs integrate social entrepreneurship strategies to achieve both financial sustainability and social impact.
Keywords: Financial Performance, Social Entrepreneurship, Regulated Micro Finance Institutions
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