Micro Finance sector in Kenya is affected by multiple risks from both internal and external business environments. Risk avoidance is a strategy where by an organization refuses to accept any exposure and loss from any activity. The study assessed on relationship between risk avoidance strategy and financial performance of Microfinance Institutions in Nairobi City County, Kenya. The study adopted descriptive research design in conducting the research. The targeted population was 51 MFIs in Nairobi which are registered under Association of Microfinance Institutions. A sample of 90 respondents was selected from 45 sampled MFIs. The collected data was analysed using SPSS (The Statistical Package for Social Sciences). Findings were that MFIs use risk avoidance strategy and there was a weak positive mutual relationship between the strategy and the financial performance of MFIs. The study concluded that, riskavoidance strategy leads to some improvement in the financial performance of MFIs in Nairobi City County.
Risk Avoidance Strategy, Financial Performance, Risks, Micro-finance Institutions
