The Mediation Effect of Competitive Advantage on Managerial Competencies-Financial Performance Nexus of Microfinance Institutions in Uganda

Authors

  • Bernard Wakabi Muhangi Mountains of the Moon University, Uganda &Uganda Management Institute, Uganda
  • Professor BadarAlam Iqbal Monarch Business School, Switzerland
  • Dr. Saturninus Kasozi-Mulindwa Uganda Management Institute, Uganda

DOI:

https://doi.org/10.47672/ajf.1775

Keywords:

Microfinance Institutions, Mediation Effect, Managerial Competencies, Competitive Advantage, Financial Performance (JEL - G21)

Abstract

Purpose: This study examined the mediating effect of competitive advantage in the relationship between managerial competencies and financial performance of Microfinance Institutions (MFIs) in Uganda.

Materials and Methods: Adopting a cross-sectional design and a quantitative approach, the study covered 94 Ugandan microfinance institutions, which are members of the Association of Microfinance Institutions in Uganda (AMFIU) in all regions of Uganda. A sample size of 76 MFIs was utilized to collect questionnaire data. The mediating effect of competitive advantage was tested using Hierarchical regression while

Findings: The study established that competitive advantage partially mediates the relationship between managerial competencies and the financial performance of MFIs in Uganda. The study also concluded that MFIs that survive competition are only those that nourish their competitive strategies and refine their strategic direction, thus improving their financial performance.

Implications to Theory, Practice and Policy: The study recommends MFIs design policies aimed at attracting competent managers with the relevant skills, knowledge, and abilities. Besides investment in physical capital, MFIs should devise deliberate competitive strategies aimed at enhancing their ability to develop attributes that allow them to outperform their competitors.

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Published

2024-02-17

How to Cite

Muhangi, B. W. M., Iqbal, P. B. ., & Mulindwa, D. S. K. (2024). The Mediation Effect of Competitive Advantage on Managerial Competencies-Financial Performance Nexus of Microfinance Institutions in Uganda. American Journal of Finance, 10(1), 13–32. https://doi.org/10.47672/ajf.1775

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