EFFECT OF ENTREPRENEURIAL ORIENTATION AND BUSINESS MODEL INNOVATIONONTHE PERFORMANCE OF MICROFINANCE BANKS: MEDIATING ROLE OF IT-ENABLED DYNAMIC CAPABILITIES
Loading...
Date
2021
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Performance of microfinance banks (MFB) has become an important issue among the scholars,
practising managers and policymakers due to the important role of the MFB inthe nationās
economic growth and development.Since they can serve as an alternative source of funds for the
active poor and unbanked people. In spite of all these, the MFB in Nigeria has been reporting
poor performance by days and this undermined the government efforts of breaking the cycle of
the predominant poverty, unemployment, and economic stagnation right from the grassroots
level. This study was set to examine the effect of entrepreneurial orientation and business model
innovation on the performance of microfinance banks throughthe mediating role of IT-enabled
dynamic capabilities. Cross-sectional research design was used to collect data from the
respondents. The population of the study consists of microfinance banks through which the study
used to draw the sample size. A PLS-SEM approach was used with aid of SmartPLS 3.2.8 to
analyse the data. The result shows that both entrepreneurial orientation and business model
innovation were significantly and positively related to the performance of MFB in Nigeria. The
result also indicates that IT-enabled DCs mediates the effect of entrepreneurial orientation (EO),
business model innovation (BMI) on organisational performance of microfinance banks.
However, individually, the linear model has shown that among the three dimensions of EO,only
proactiveness and innovativeness have a direct significant effect on organisational performance
of MFB. The result did not indicate a significanteffect of competitive aggressiveness onthe
performance of MFB. On the other hand, value creation, value proposition and value capture
were significantly related to the organisational performance of MFB. At the mediation model, it
was found that IT-enabled DCs mediates the effect of all the six antecedent constructs of
proactiveness, innovativeness, competitive aggressiveness as well as value creation, value delivery and value capture on organisational performance of MFB in Nigeria. The finding of this
study reveals that a high level of EO and BMI leads to a high level of organisational performance
of MFB in Nigeria and IT-enabled DCs serves as a good mediator. This study recommends that
MFB managers to continue to pursue initiatives that promote entrepreneurship and business
model innovation in order to increase both breadth and depth of outreach to active poor and
unbanked people thereby increasing their performance.This is the first study to combine the
effect of EO, BMI and IT-enabled DCs on organisational performance of MFB. It is,therefore,
contributes to the development of literature in this direction.