From Competitive Strategy to Perceived Performance: The Mediating Role of Technology Adoption in Microfinance Institutions
Leah Jeruto Chemitei *
School of Business and Economics, Garissa University, Garissa, Kenya.
Bashir Maalim
School of Business and Economics, Garissa University, Garissa, Kenya.
Aden Ali Abdi
School of Business and Economics, Garissa University, Garissa, Kenya.
*Author to whom correspondence should be addressed.
Abstract
Background: Microfinance institutions (MFIs) in Northern Kenya operate in geographically dispersed and infrastructure-constrained markets in which competitive positioning and digital capability are increasingly intertwined.
Aim:This study examined whether technology adoption statistically mediates the association between Porter’s generic competitive strategies and perceived MFI performance.
Research Design: This study adopted an explanatory sequential mixed-methods research design to examine the influence of Porter’s generic strategies on the performance of conventional, Islamic, and hybrid microfinance institutions (MFIs) in Northern Kenya, and to determine the mediating role of technology adoption.
Research Setting and Duration: The study was conducted in Garissa, Wajir, Mandera, and Isiolo counties in Northern Kenya. The target population comprised 500 managers and operational staff from participating conventional, Islamic, and hybrid MFIs. The study was conducted over a period extending from March 2025 to September 2026, with field data collection and analysis undertaken within a six-month period.
Methodology: A cross-sectional correlational survey was used to estimate associations among Porter’s generic strategies, technology adoption, and perceived MFI performance.
Findings: The findings provided clear statistical evidence of a significant indirect relationship between the variables, suggesting that the effect of the independent variable on the dependent variable was transmitted, at least in part, through the mediating variable. The combined Porter’s Generic Strategies index was strongly associated with technology adoption, and technology adoption remained positively associated with perceived performance after the strategy index was controlled. The persistence of a statistically significant direct association after the inclusion of technology adoption indicates that the mediator accounted for only part of the overall strategy–performance association.
Conclusions: Technology adoption statistically mediated part of the association between the combined Porter’s Generic Strategies index and perceived MFI performance in Northern Kenya. The study consequently supports viewing technology adoption as a complementary strategic capability that can help MFIs implement cost-efficiency, differentiation, and market-focus objectives.
Keywords: Technology adoption, statistical mediation, Porter’s generic strategies, perceived MFI performance, microfinance institutions