Cultural Entrepreneurship as a Driver of Financial Performance in Kenya’s Regulated Microfinance Sector

Microfinance institutions (MFIs) in Kenya have played a crucial role in providing financial services to underserved populations. They have contributed to poverty alleviation and economic development. However, as the microfinance sector evolved, MFIs faced increasing pressure to address sustainable entrepreneurship considerations in their operations. The integration of sustainable entrepreneurship presents both opportunities and challenges for MFIs, as they aim to balance financial and social sustainability with social impact. Therefore, understanding the relationship between cultural entrepreneurship and MFI performance is essential for guiding strategic decision-making and promoting the long-term viability and impact of microfinance in Kenya. The study was designed to determine how cultural entrepreneurship affects the financial performance of regulated microfinance institutions in Kenya. The study was anchored to the Triple Bottom Line Theory. Descriptive and correlational research designs were adopted. The target population comprised 265 MFI managers and heads of departments, while the sample size of 160 was determined using Slovin’s sample size determination formula. Stratified sampling technique was employed to collect data from respondents. The descriptive results revealed that cultural entrepreneurship received strong support, reflecting a commitment among MFIs to cultural impact. Positive correlations suggest that cultural entrepreneurship contributes to improved financial performance outcomes for microfinance institutions in Kenya. The findings indicate that MFIs should prioritize cultural entrepreneurship by fostering community engagement, enhancing financial inclusivity, and supporting culturally responsible financial products. Cultural entrepreneurship significantly contributes to the overall financial performance of MFIs by strengthening customer trust, fostering long-term client relationships, and improving loan repayment rates.