In the fast-evolving world of finance, resources and technology are not the only factors that can determine the success of a microfinance bank; the competencies of the leaders are paramount. This paper investigated how leadership competency gaps affect the management performance of sampled microfinance banks in North-Central Nigeria in strategic thinking, communication, and flexibility/adaptability competencies. The research design adopted was quantitative, and a sample of 84 respondents was selected using stratified sampling techniques from a population of 120 across different microfinance banks in the North-Central region to gather primary data using structured questionnaires. Hypothesized relationships were tested using descriptive statistics and regression analyses. The findings revealed that strategic competency gaps had a non-significant impact on operational efficiency (β = 0.106, Sig=0.612), communication competency gaps also showed a non-significant influence on operational efficiency (β = 0.155, Sig =0.377), whereas decision-making competency gaps had a highly significant effect on operational efficiency (β = 0.966, Sig=0.000). These results show that while decision-making competency gaps are a critical challenge to managerial performance and service delivery, strategic and communication competency gaps do not have significant effects on operational efficiency and team performance in microfinance banks. The study concludes that addressing decision-making competency gaps is essential for improving operational performance, while strategic and communication competency gaps should be further explored in future research. The uniqueness of this study lies in its simultaneous focus on multiple leadership competencies and their distinct impacts on management outcomes in the microfinance industry, offering valuable insights for policymakers and bank managers.
Keywords: Leadership competency gaps, Microfinance Banks, Operational Efficiency, communication, strategic thinking
