Promoting an Intrapreneurial Environment in Microfinance institutions as a catalyst to innovation. A Case of Ugandan MFIs.

Abstract

The purpose of this paper is to examine the extent to which the intrapreneurial environment within Microfinance institutions hereafter referred to as MFIs can enhance innovation. It hypothesizes that an improvement in the level of the intrapreneurial environment will lead to increased levels of innovation in a given MFI. The challenge is, despite the dynamic environment in which MFIs operate, little is known how the concurrent internal environment here in referred to as the intrapreneurial environment enhances innovation which is a critical factor for business’ growth.The paper is extracted from a wider study that mixed quantitative and qualitative methods. The results presented in this paper are based on the quantitative approach. The wider study was anchored in the componential theory of innovation and resource based theory to understand how and the extent to which the intrapreneurial environment influences performance. This paper’s arguments are based on the componential theory. The paper also examines the levels of the intrapreneurial environment and innovation in the studied MFIs.From the results presented in this paper, it is concluded that MFIs need to nurture an environment that allows them to continuously innovate. This requires support of top management for innovative ideas to flow from all units of their organization. Innovation should not be a one off activity in some areas of the organization but should be embedded within the overall organizational vision. There should be support, recognition and reward of innovative ideas through promotion of an intrapreneurial environment. Such reorientation will enable cope with the ever changing dynamic environment.