Transitioning from a failed micro-lender to a transactional bank

Abstract

The failures of banks or financial institutions have an adverse effect on a country's economy. This study aimed to investigate the probability of a failed micro-finance institution transitioning to a retail or transactional bank. The following factors were thought to impact on the success of transitioning to or creating a new business:  The innovativeness of the strategy the organisation aims to follow; -The organizational culture within the organisation; - The leadership of the organisation; - The innovativeness and capabilities of the organisation's systems; and - The structure of the organisation. A literature review was conducted in order to clarify the different financial sectors in South Africa, specifically the banking and micro-finance sectors. Thereafter the literature was used to create a questionnaire to measure the factors impacting the success of a new business venture. The data was analysed using statistical methods and the results were used to provide insight into whether or not the bank in question was using these critical success factors in a positive or negative way and to provide recommendations to further assist in ensuring these factors were utilised to the advantage of the bank.