Abstract:
Microfinance cooperatives (MFCs) play a key role in socio-economic development, predominantly in
developing countries. However, studies focusing on the relationship between entrepreneurial
orientation (EO) and the performance of MFCs are limited, particularly in Tanzania. This study was
informed by the resource-based view to examine the influence of EO dimensions on the performance
of MFCs in Tanzania. Specifically, the study focused on four dimensions of EO namely;
innovativeness, proactiveness, risk taking, and competitive aggressiveness behaviours. Data were
obtained from 299 stratified sampled managers of MFCs through the administration of a structured
questionnaire. In testing this relationship, Partial Least Squares Structural Equation Modelling (PLS
SEM) was employed and revealed that only proactiveness, innovativeness, and competitive
aggressiveness behaviours positively and significantly influenced the performance of MFCs. However,
risk taking behaviour was insignificant on the performance of MFCs. The study shows that EO is a
crucial managerial resource and capability that helps MFCs to reallocate core competencies to achieve
desired goals. Thus, MFCs need to strengthen their ability to implement entrepreneurial strategies
effectively. Also, regulators and other key stakeholders need to participate in strengthening these
capabilities through different interventions including trainings to address the performance challenges
encountered by MFCs.
