Determinants of the governance quality of microfinance institutions

Tchuigoua, Hubert Tchakoute

doi:10.1016/j.qref.2015.02.011

Cited by 16 publications

(12 citation statements)

References 52 publications

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“…Another particular characteristic of the MFIs' borrowers is that they usually lack credit history and collateral which limits their access to financing from traditional commercial banks (Banerjee and Duflo, 2007). Therefore, it is not surprising that MFIs have attracted considerable attention by academics and policy makers, with recent studies focusing on a variety of topics like the impact of microfinance on poverty or child health outcomes (Imai et al, 2012;DeLoach and Lamanna, 2011), competition between microfinance non-governmental organizations (Ly and Mason, 2012), microfinance and female empowerment (Ngo and Wahhaj, 2012), the use of credit scoring models from MFIs (Blanco et al, 2013;Cubiles-De-La-Vega et al, 2013), the diversification benefits from adding microfinance funds to a portfolio of risky international assets (Galema et al, 2011), the drivers of buffer capital (Tchuigoua, 2016), and the determinants of governance quality (Tchuigoua, 2015).…”

Section: Introductionmentioning

confidence: 99%

Assessing the overall performance of microfinance institutions

Gaganis

2016

IJBAAF

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In recent years, there has been a growing interest in microfinance institutions (MFIs). Some studies assess the financial condition of MFIs on the basis of individual criteria while a few others attempt to explain differences in profitability on the basis of firm-level attributes and country-level characteristics. However, there is no widely accepted measure for assessing the performance of MFIs. At the same time, these institutions face a challenge, as they have to provide financial services to the poor, and at the same time to cover their costs and grow. The present study employs a two stage analysis. In the first stage, I propose the use of the PROMETHEE II multicriteria method which is based on the outranking relations concept. This allows the evaluation of the overall performance of the MFIs using a set of, often conflicting, financial performance and social performance criteria. In the second stage of the analysis, I use regression analysis to explain differences in the overall performance of the MFIs on the basis of various country-specific characteristics such as macroeconomics, financial and institutional development. The results show that the size of the MFIs has a robust non-linear, inverted U-shaped impact on overall performance. Age and the status of non-governmental institution also appear to matter. As it concerns the country-level attributes, GDP growth has a robust positive impact on overall performance. Regional differences also appear to matter.

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Section: Introductionmentioning

confidence: 99%

Assessing the overall performance of microfinance institutions

Gaganis

2016

IJBAAF

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“…Our review found that only a handful of studies investigated the determinants of MFI governance quality. It is also evident that past studies used a limited number of governance mechanisms (Beisland et al , 2014; Tchakoute Tchuigoua, 2015). Future scholars can extend the current line of inquiry by drawing on a longitudinal analysis with improved measurements of MFI governance disclosure quality.…”

Section: Discussion Literature Gaps and Future Research Directionsmentioning

confidence: 99%

“…For example, Beisland et al (2014) found that governance mechanisms such as CEO duality, foreign directors, internal audit and competition significantly influence the rating performance of MFIs. In a similar vein, Tchakoute-Tchuigoua (2015) investigated the determinants of microfinance governance quality. His study found that key CG mechanisms such as board committee, board expertise, board activity and ownership type are influencing factors for MFI rating scores as a proxy of governance quality.…”

Section: Reporting and Dissemination Of Findingsmentioning

confidence: 99%

Microfinance governance: a systematic review and future research directions

Rasel¹,

Win²

2020

JES

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PurposeThe purpose of this article is to systematically review extant research on the corporate governance (CG) of microfinance institutions (MFIs) from a global perspective. In the process, it discusses scholarly contributions and highlights key issues from the findings of past studies on several governance attributes, in particular, their interconnections and influence on different institutional outcomes of the sector.Design/methodology/approachAlthough academic work on microfinance governance is substantial, prior studies lack a comprehensive approach to reviewing the literature on this topic. We adopted a systematic method to review past studies on microfinance CG by applying particular inclusion and exclusion criteria. In this regard, the study developed specific questions and sought to find their answers from the existing literature.FindingsThe findings from our research indicate that microfinance governance-performance relationship is the central focus of the majority of our reviewed papers, although a few attempts have been made to explain the interconnection between CG mechanisms at the firm and institutional level. Our findings also show that existing studies have used a variety of techniques to measure MFI performance vis-à-vis their hybrid mission, such as profitability and outreach. Moreover, the study found that common topics discussed in the mainstream literature include board structure, CEO characteristics, audit quality, external governance, disclosure and MFI ownership type.Research limitations/implicationsThis review has some limitations that warrant further research. First, we considered only peer-reviewed scientific publications for our systematic review. Second, we omitted non-English journal papers from our sample. In light of these limitations, we provide some future research directions that may shed further light on our current inquiry.Originality/valueThis paper evaluates past relevant studies using a systematic approach (in preference to the commonly used narrative approach) for a span of over eighteen years; thereby contributing significantly to the sectoral governance literature. This study is novel in that it offers new incentives and opportunities for further research in order to meet the shortcomings of reviewed papers from various theoretical, empirical, methodological and geographical standpoints.

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“…They also show that CEO duality reduces the social performance. In a recent article of Tchuigoua (2015), he suggests that different board characteristics are the significant determinant of MFIs governance. In a conceptual paper, Estapé-Dubreuil and Microfinancing, governance and performance Torreguitart-Mirada (2015) support the above-mentioned findings and also suggest that the board has a significant association with the social performance of MFIs.…”

Section: Microfinance Institutions' Governance and Performancementioning

confidence: 99%

Microfinancing, governance, and performance: a South Asian perspective

Saeed¹,

Javed

Noreen

2018

JEFAS

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Purpose This paper aims to investigate the relationship between microfinance institutions (MFIs) governance and performance. Design/methodology/approach Using a sample of 215 MFIs from six South Asian countries over the period from 2005 to 2009, the authors examine the effect of chief executive officer (CEO) duality, board size, female CEO, urban market coverage, bank regulation and lending type on financial and social performance of MFIs. Findings The findings provide evidence that, on the one hand, empowered CEO, large board size and individual lending improve the MFI financial performance and, on another hand, bank regulation and serving in the urban market have a significant association with MFIs’ social performance. In an additional analysis, the authors also test this relationship before, during and after the financial crisis of 2007. During crisis period, MFIs’ individual lending reduces the operational cost and bank regulation increases the average loan size in South Asian MFIs. Originality/value Those studies that are presented in the literature review conclude their result on the bases of global, European, East African and specific to some countries sample. There is no study presented in the whole literature on South Asian sample, in which all countries really face the problem of poverty.

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Determinants of the governance quality of microfinance institutions

Cited by 16 publications

References 52 publications

Assessing the overall performance of microfinance institutions

Assessing the overall performance of microfinance institutions

Microfinance governance: a systematic review and future research directions

Microfinancing, governance, and performance: a South Asian perspective

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