Research Article
Predictive Power of Network Development Capability on Firm Performance: Empirical Evidence from Deposit-Taking Savings and Credit Cooperative Societies in Kenya
Veronica Wanjiru Ruo*
,
Godfrey Muigai Kinyua
Issue:
Volume 12, Issue 5, October 2026
Pages:
86-99
Received:
21 August 2026
Accepted:
7 September 2026
Published:
27 September 2026
Abstract: The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing customer complaints, operational inefficiencies, and declining stakeholder confidence. These challenges highlight the need to strengthen organizational capabilities, particularly network development capability. This study examined the predictive power of network development capability on the performance of DT-SACCOs in Nairobi City County, Kenya. The study was anchored on Relational View Theory, Dynamic Capabilities Theory, and the Balanced Scorecard Model. An explanatory research design was adopted. The target population comprised 475 senior- and middle-level management employees from 41 DT-SACCOs, from which a sample of 215 respondents was selected using proportionate stratified sampling. Data were collected using semi-structured questionnaires comprising both closed- and open-ended questions. Quantitative data were analyzed using descriptive and inferential statistics with the aid of SPSS, while qualitative responses were analyzed thematically. The findings revealed that network development capability had a positive and statistically significant predictive effect on firm performance (β = 0.462, p = 0.001). The qualitative findings further indicated that strategic partnerships, trust building, strategic alignment, communication, and network governance were important aspects of network development capability, although challenges remained in implementing collaborative projects, optimizing relationships, and integrating communication systems. The study concludes that strengthening network development capability can enhance the performance of DT-SACCOs. It therefore recommends that SACCOs prioritize trust building, formalize partnership agreements, strengthen communication and coordination mechanisms, and align networking activities with strategic objectives to improve operational efficiency, customer satisfaction, stakeholder confidence, and overall organizational performance.
Abstract: The Savings and Credit Cooperative Societies (SACCOs) sector in Kenya plays a critical role in promoting financial inclusion through the provision of affordable savings and credit services. However, despite growth in assets and membership, deposit-taking SACCOs (DT-SACCOs) continue to face challenges, including slow loan processing, increasing cust...
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Research Article
Open-mindedness as a Microfoundation of Competitiveness of Microfinance Banks
Issue:
Volume 12, Issue 5, October 2026
Pages:
100-114
Received:
7 October 2026
Accepted:
22 October 2026
Published:
31 October 2026
DOI:
10.11648/j.ebm.20261205.12
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Abstract: The microfinance banking industry has contributed significantly to socioeconomic development at family, community, and national levels through financial inclusion, particularly by expanding access to financial services among traditionally underserved groups. However, continued reliance on traditional product designs, conventional financing methods, and standardized service delivery models has constrained the ability of microfinance banks to respond to diverse customer needs and compete effectively in a dynamic financial services environment. This study examined the effect of open-mindedness on the competitiveness of microfinance banks in Kenya, drawing its theoretical anchorage from Dynamic Capabilities Theory and the Open Innovation Model. The study adopted the positivist research paradigm and employed an explanatory research design, consistent with its objective of examining causal linkages among the study variables. The units of analysis and observation were microfinance banks and management personnel, respectively, with a population of 616 management staff. A two-stage sampling procedure combining proportionate stratified and simple random sampling was employed to select 243 management staff, from whom data were collected using a structured questionnaire. Frequency counts, measures of central tendency and measures of dispersion were used to summarise the data, while simple linear regression served as the primary empirical model. The findings established that open-mindedness had a positive effect on the competitiveness of microfinance banks. The study recommends that the Head of Finance and Strategy establish a framework that promotes receptiveness to new ideas and alternative perspectives, facilitates real-time customer feedback and co-creation of value, and incorporates customer insights and adaptive solutions into continuous improvements in processes, products, and services.
Abstract: The microfinance banking industry has contributed significantly to socioeconomic development at family, community, and national levels through financial inclusion, particularly by expanding access to financial services among traditionally underserved groups. However, continued reliance on traditional product designs, conventional financing methods,...
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