Effect of Product Innovations on Growth of Microfinance Institutions in Narok Town

Abstract

Innovations enhance long and short-term decisions making towards remaining competitive in the business environment. MFIs in Kenya and more so in Narok Town are no exception. The study sought to assess the effect of product innovation strategies on the growth of microfinance institutions in Kenya, Narok Town. The research adopted cross-sectional design and a census was applied of 180 respondents employed in 11 registered MFIs. Primary and Secondary data was collected and correlation and linear regression analyses were applied. The results showed that product innovation had a significant positive association to growth of MFIs in Narok Town (r= 0.190, p=0.019), and product innovation had a positive Statistical effect on growth of MFIs in Narok Town (β=0.169, t (149) = 2.35,p=0.02<0.05). In conclusion, it is evident that the more MFIs invest in innovative products the better their growth. The study therefore, recommends that the MFIs in Narok town need to invest more in product innovation as a mean to sustain their growth and remain afloat in the completive market. Keywords: Product Innovation, Growth, Strategy