Impact of organizational characteristics on change management practices at digital credit providers in Kenya
Date
2025
Authors
Wandurwa, D.
Journal Title
Journal ISSN
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Publisher
Strathmore University
Abstract
The Central Bank of Kenya's 2022 Digital Credit Providers Regulations introduced clear standards to ensure transparency and ethical practices in digital lending. This study aimed to examine the effect of organizational characteristics on change management practices implemented by Digital Credit Providers in Kenya in response to these regulations. The specific objectives were to determine the influence of governance structure, financial performance, firm age, and ownership structure on strategic changes and operational changes among Digital Credit Providers in Kenya. The research employed a mixed-methods approach, combining qualitative insights and quantitative analysis through questionnaires administered to employees of Digital Credit Providers regulated by the Central Bank of Kenya. Descriptive and inferential statistics were used to analyze the quantitative data, while qualitative data from open-ended questions were examined using content analysis techniques to provide deeper insights into the providers' experiences and perspectives. The study found that governance structure, financial performance, firm age, and ownership structure had significant positive influences on both strategic changes and operational changes. Regression analysis revealed that these organizational characteristics collectively explained a substantial portion of the variation in strategic changes and operational changes. Financial performance emerged as the strongest predictor of strategic changes, while ownership structure showed the strongest influence on operational changes. Governance structure demonstrated a significant impact on both strategic adaptations and operational adjustments, with robust governance mechanisms enabling effective decision-making and compliance management. Firm age had a positive effect on strategic changes and operational changes, with established regulatory relationships and accumulated operational insights facilitating smoother adaptation. The study concludes that organizational characteristics play a pivotal role in shaping digital credit providers' ability to implement strategic and operational changes in response to regulatory requirements. The findings underscore the importance of well-designed governance frameworks, robust financial standing, accumulated experience through firm age, and clear ownership structures in driving successful regulatory compliance and adaptation. The study recommends that policymakers should consider providing guidance on optimal board compositions and structures, implementing supportive measures to help providers manage the financial impact of compliance, adopting a tiered approach to compliance requirements based on firm age, and establishing guidelines related to ownership structure to promote transparency and responsible practices.
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Citation
Wandurwa, D. (2025). Impact of organizational characteristics on change management practices at digital credit providers in Kenya [Strathmore University]. http://hdl.handle.net/11071/15988