Abstract:
Growth of Microfinance Sector (MFIs) in Kenya is exposed to various risks which originate from both the
internal and external environment. Strategic risks threaten their financial viability and long-term sustainability
of MFIs. The purpose of this study was to establish the effect of strategic risk management strategies on the
growth of microfinance sector in Kenya. A sample of seventeen (17) MFIs was selected using the random
sampling approach from the population of fifty seven (57). The study adopted a correlation survey research
design. A questionnaire and an interview schedule were the main data collection tools. The preferred statistical
tool for quantitative data analysis was Statistical Package for Social Sciences (SPSS) computer software.
Qualitative data was analyzed using content analysis. The study utilized descriptive and regression analysis to
determine the relationship between strategic risk management strategies and growth of MFI. The study results
were that strategic risk management strategies were a significant determinant of growth in MFIs. The findings
indicated that there were several strategic management measures that had been put in place by MFIs to
promote growth which include the existence of board members with the skills and ability to lead the MFI
strategically in addition to independent directors who agreed on the MFIs mission and strategic direction.
Based on the findings, the study recommended that the MFIs should continue practicing effective strategic risk
management practices such as good governance measures
