Governance of Microfinance Institutions in Nairobi, Kenya

Abstract

The purpose of this study was to assess the governance factors affecting microfinance institutions in Nairobi County. Applying descriptive research design, the study targeted senior managers, management and supervisory board members. Data was collected using structured questionnaire and analyzed to obtain both descriptive and inferential statistics. Results show that financial controls and staff competency, significantly impact on the performance of these firms in terms of compliance, internal audits, reporting and payment systems, ethical and integrity values, risk assessment staff experience, training and skills match, employment procedures. It is recommended that financial controls in MFIs should be sustained, while, ensuring continuous adhering to the regulations governing the operations of MFIs. There is need for continuous provide capacity building to staff to ensure that they are updated with current issues in the sub-sector for purposes of making sound decisions to the benefit of the institutions as well as the clients.