IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i7p2000-2014.html
   My bibliography  Save this article

Effect of Transformational Leadership on Performance of Microfinance Banks in Kenya

Author

Listed:
  • Linda Muthoni Nthiga

    (The Management University of Africa, Nairobi, Kenya)

  • Dr. John Cheluget

    (The Management University of Africa, Nairobi, Kenya)

  • Dr. James Mwikya

    (Kirinyaga University, Kerugoya, Kenya)

Abstract

Microfinance banks in Kenya were established to primarily focus on providing financial services to low-income clients, including micro-entrepreneurs and small business owners who typically cannot access traditional bank loans. According to central bank of Kenya, annual report and financial statements 2019 to 2020 and bank supervision annual report 2020, the microfinance banks recorded a combined loss before tax of KSh 1.0 billion in the year ended June 2020. The purpose of this study was to assess the effect of transformational leadership on performance of microfinance banks in Kenya. The study was anchored on transformational leadership theory and stakeholder theories. The study adopted positivism research philosophy and applied cross-sectional survey design. The study’s target population was the 14 microfinance banks as listed by the central bank of Kenya as of 31st December 2020. The study applied stratified proportionate random sampling and questionnaires were used to collect data from 366 respondents. Primary data was analysed using inferentially analysis. The results revealed: strong positive correlation (R=0.684) between transformational leadership and performance of microfinance banks in Kenya. The study recommends microfinance banks should adopt transformational leadership to achieve high organisational performance through individual consideration and intellectual stimulation through helping the employees develop themselves career wise and getting the employees to think and generate new ideas and new ways of doing things and business.

Suggested Citation

  • Linda Muthoni Nthiga & Dr. John Cheluget & Dr. James Mwikya, 2023. "Effect of Transformational Leadership on Performance of Microfinance Banks in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(7), pages 2000-2014, July.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:7:p:2000-2014
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-7/2000-2014.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/effect-of-transformational-leadership-on-performance-of-microfinance-banks-in-kenya/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Weina Qu & Mengnuo Dai & Wenguo Zhao & Kan Zhang & Yan Ge, 2016. "Expressing Anger Is More Dangerous than Feeling Angry when Driving," PLOS ONE, Public Library of Science, vol. 11(6), pages 1-10, June.
    2. Timothy J. Quigley & Donald C. Hambrick, 2015. "Has the “CEO effect” increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 821-830, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weifeng Xu & Qingsong Ruan & Chang Liu, 2019. "Can the Famous University Experience of Top Managers Improve Corporate Performance? Evidence from China," Sustainability, MDPI, vol. 11(24), pages 1-20, December.
    2. Ajay Bhaskarbhatla & Luis Cabral & Deepak Hegde & Thomas (T.L.P.R.) Peeters, 2017. "Human Capital, Firm Capabilities, and Innovation," Tinbergen Institute Discussion Papers 17-115/VII, Tinbergen Institute, revised 03 Mar 2020.
    3. Tutun Mukherjee & Som Sankar Sen, 2022. "Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-50, December.
    4. Wang, Gang & Holmes, R. Michael & Devine, Richard A. & Bishoff, John, 2018. "CEO gender differences in careers and the moderating role of country culture: A meta-analytic investigation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 148(C), pages 30-53.
    5. Michael C. Withers & Markus A. Fitza, 2017. "Do board chairs matter? The influence of board chairs on firm performance," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1343-1355, June.
    6. Shouyu Yao & Zhuoqun Wang & Mengyue Sun & Jing Liao & Feiyang Cheng, 2020. "Top executives’ early‐life experience and financial disclosure quality: impact from the Great Chinese Famine," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4757-4793, December.
    7. Mohamed Toukabri & Lamia Kalai, 2024. "How does sustainability leadership improve climate change reporting? The choices associated with a sustainable board- A management perspective," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 29(7), pages 1-48, October.
    8. Gounopoulos, Dimitrios & Pham, Hang, 2018. "Specialist CEOs and IPO survival," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 217-243.
    9. Huang, Jiexiang & Roberts, Helen & Tan, Eric K.M., 2024. "Media uncertainty and risk-taking," International Review of Financial Analysis, Elsevier, vol. 91(C).
    10. Byun, Kyung-Ah (Kay) & Al-Shammari, Marwan, 2021. "When narcissistic CEOs meet power: Effects of CEO narcissism and power on the likelihood of product recalls in consumer-packaged goods," Journal of Business Research, Elsevier, vol. 128(C), pages 45-60.
    11. Kong, Xiaoran & Zhang, Xueying & Yan, Cheng & Ho, Kung-Cheng, 2022. "China's historical imperial examination system and corporate social responsibility," Pacific-Basin Finance Journal, Elsevier, vol. 72(C).
    12. Marko Reimer & Sebastiaan Doorn & Mariano L. M. Heyden, 2018. "Unpacking Functional Experience Complementarities in Senior Leaders’ Influences on CSR Strategy: A CEO–Top Management Team Approach," Journal of Business Ethics, Springer, vol. 151(4), pages 977-995, September.
    13. Magdalena Abt & Dodo zu Knyphausen-Aufseß, 2017. "Chief human resources officers on top management teams: an empirical analysis of contingency, institutional, and homophily antecedents," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 49-77, June.
    14. Li, Guangqin & Shao, Shuai & Zhang, Lihong, 2019. "Green supply chain behavior and business performance: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 445-455.
    15. Gaurav Gupta & Jitendra Mahakud & Vivek Verma, 2020. "CEO's education and investment–cash flow sensitivity: an empirical investigation," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 17(4), pages 589-618, December.
    16. White, Joshua V. & Harms, P.D. & Borgholthaus, Cameron J. & Tuggle, Christopher S., 2023. "I’m not the executive that I used to be: Understanding causes and consequences of personality change in the upper echelons," Journal of Business Research, Elsevier, vol. 167(C).
    17. Timothy J. Quigley & Craig Crossland & Robert J. Campbell, 2017. "Shareholder perceptions of the changing impact of CEOs: Market reactions to unexpected CEO deaths, 1950–2009," Strategic Management Journal, Wiley Blackwell, vol. 38(4), pages 939-949, April.
    18. Nina Engels & Denise Fischer-Kreer & Malte Brettel, 2022. "CHRO firm dinosaur versus CHRO role gorilla: the effect of CHRO company and role tenure on firms’ social performance," Journal of Business Economics, Springer, vol. 92(6), pages 929-954, August.
    19. Yongeun Choi & Wonsub Eum & Taewon Kang & Jeong‐Dong Lee, 2022. "Impacts of entrepreneurial experience on firm performance in IPO firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4064-4076, December.
    20. Tim Heubeck & Reinhard Meckl, 2023. "Microfoundations of innovation: A dynamic CEO capabilities perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3108-3126, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:7:p:2000-2014. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.