Abstract:
The objectives of this study were to establish the extent to which institutional change management is a challenge in the transformation of microfinance institutions into regulated deposit taking institutions in Kenya and to make recommendations for successful transformation. The target population was 48 member institutions of AMFI. Using purposive sampling, the study selected 25 MFIs from which 100 respondents were selected using simple random sampling. Data was first explored for the underlying factor structure through factor analysis before descriptive and inferential statistical analyses. The study established a significant association between institutional change management and successful MFI transformation in Kenya and concluded that institutional change management was a significant challenge in the transformation of microfinance institutions. The study recommends that transforming MFIs should prepare well so as to overcome institutional change management challenges. It recommends further research to determine the impact of MFI transformation on overall financial inclusion in Kenya.
