Perceived Influence of Digital Transformation on the Performance of Microfinance Institutions in Tanzania.

This study investigates the perceived influence of digital transformation (DT) on the performance of microfinance institutions (MFIs) in Tanzania; focusing on managerial, financial, and operational dimensions. Employing the resource-based view (RBV), the study demonstrates how digital transformation serves as a crucial asset that enhances organizational performance and provides a competitive edge. With the aid of self-administered questionnaires, the data were collected from 146 randomly sampled MFI owners/managers, and analysed using the partial least squares–structural equation modelling (PLS-SEM) technique in SmartPLS 5. The findings reveal that DT positively and significantly influences the managerial, financial, and operational performance of MFIs. The paper emphasizes the contribution of RBV in showing how DT is an unique and valuable resource that drives performance and competitive advantage within the financial sector. To policymakers and practitioners, the findings inform targeted policies and initiatives that facilitate technology adoption and resource optimization. Furthermore, the findings encourage future research to explore the diverse economic sectors, methodological approaches, and contextual variables to deepen the understanding of the impact of digital transformation across various settings.