Business Model Innovation – A Determinant of Business Sustainability among Micro-Lending Institutions in Kenya: Empirical Review.

Abstract

Journal ArticleThe purpose of this paper is to review the extant literature on the effect of business model innovation on business sustainability among microlending institutions in Kenya. Microlending institutions operate in a competitive business environment full of major financial institutions thus the need to be very innovative. Tapping into the capabilities of technology and increased penetration of mobile connectivity, microlenders can innovate their business models toward the unbanked and underserved population in Kenya. Since sustainability is beyond profit only but people and the planet, it is critical for such entities to rethink their business models to deliver the triple bottom line strategy within their business operations. The extant literature reviewed in the area of business model innovation and business sustainability reveals a nuanced mutuality. Microlenders that deploy their innovative business model increase their customer base, especially among the unbanked. The review also reveals that innovative business models within the broader triple-bottom-line framework can increase their profits without harming the planet and the people. Findings also showed that business model innovation can cut costs, reduce employee turnover, and increase social investment for microlending institutions. However, microlending institutions still face some challenges to business sustainability including initial costs, inadequate policies, and legislation to operationalize the triple bottom line framework in Kenya. These gaps therefore present further opportunities for scientific inquiry into solutions that can spur business sustainability among microlenders in Keny