Factors Influencing Successful Transformation of MFIs into DTMs

Micro Finance Institutions in Kenya seek to transform mostly to Deposit Taking Micro finance institutions as a platform to access cheap deposit funds. This helps improve their ability to lend larger loans with longer repayment period. These aspects influence their financial performance positively. Other advantages associated with transformation include improved governance structure, enhanced customer service and more products being offered to customers. Despite the advantages associated with transformation of MFIs into deposit taking MFIs, there are diverse challenges that may occur during transformation. These challenges include struggles with redefinition of identity, redrawing the boundaries of the firm and issues of legitimacy. This is due to the hybrid nature of the institutions that is the social duties of MFIs which is poverty alleviation and the commercial need to be financially self-sustaining. This book examines factors influencing transformation of Micro Finance Institutions (MFIs) into deposit taking microfinance institutions in Nakuru.