The Relationship between Strategic Resources and Profitability of Fintech Firms in Kenya: Case of M-Tiba

Abstract

Fintech firms face significant strategic challenges despite the rapid growth. This calls for effective strategic resources which are the basic determinants of profitability of a firm. M-Tiba is facing a significant financial performance affecting its profitability, low and irregular user contribution and donation and economic constraints affecting premium payments. This study sought to explore influence of strategic resources on profitability of fintech firms in Kenya, focusing solely on M-Tiba. The specific objectives were as follows; To ascertain the influence of human resources on profitability of M-Tiba, to assess the influence of physical resources on profitability of M-Tiba, to establish the influence of intellectual resources on profitability of M-Tiba and to evaluate the influence of strategic resources profitability of M-Tiba. The theories to back up the study were resource-based view as the anchor theory, strategic profit model and dynamic capability. This study utilized M-Tiba Post-Covid data from 2021 to 2024. It did employ purposive sampling. This study and adopted a descriptive research design. Secondary data was obtained from annual financial reports using data collection sheets. Data was then edited and analyzed using descriptive statistics and inferential statistics (ANOVA and F-tests), using SPSS software. Diagnostic tests were used during data analysis. This included multicollinearity test using VIF to check correlations between independent variables, and normality tests such as Shapiro – Wilk test to test whether data is normally distributed. Ethical considerations were followed fully. The findings revealed showed a strong and positive relationship between human, physical, and intellectual resources and financial performance. The Human Resource Index rose from 6.5 to 8.3, aligning with NPM and ROA improvements from 11.4% to 16.3% and 8.3% to 12.4%, respectively. Physical resources such as real estate sites, vehicles, and tech devices expanded significantly, correlating with the highest ROA coefficient (0.991), indicating enhanced asset utilization and operational scalability. Intellectual resources, including smart APIs and data analytics tools, showed strong links with profitability, with correlation coefficients of 0.962 for NPM and 0.969 for ROA. A composite strategic resource index also demonstrated a perfect model fit (R² = 1.000), affirming that the combined development of internal resources is a reliable predictor of profitability. The findings validated key theoretical frameworks Resource-Based View, Strategic Profit Model, and Dynamic Capability Theory by illustrating how M-TIBA’s strategic investments in human capital, physical infrastructure, and intellectual property drive financial growth. In conclusion, the study confirmed that a coordinated and deliberate approach to strategic resource development significantly enhances financial performance in health-oriented fintech firms operating in dynamic and resource-constrained environments. This study will offer new insights to specific types of resources and their effect while guiding health fintech especially startups on how to identify and prioritize strategic resources to foster a competitive advantage and improve profitability