Role of governance on performance of microfinance institutions in Bangladesh

Hasan, Taufiq; Quayes, Shakil; Khalily, Baqui

doi:10.1007/s40822-018-0102-8

Cited by 25 publications

(34 citation statements)

References 39 publications

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“…Stakeholder theory supports the same proposition, along with more stakeholder engagement by the corporate board (Freeman, 2010). The theories mentioned above also highlight that board size may affect the decision-making process, either positively or adversely (Hasan et al, 2019).…”

Section: Theoretical Discussion and Hypothesis Developmentmentioning

confidence: 69%

“…Australia, the UK, New Zealand, the US, and Canada (Biswas, 2015). The two-tier or monitoring board practices are absent in the microfinance sector (Hasan et al, 2019). Nonetheless, organisations in this sector have a monitoring system through the appointment of outside directors to the board.…”

Section: Microfinance Board Practices In Bangladeshmentioning

confidence: 99%

“…This authoritative body administers and enforces the legislation and securities laws under the Securities and Exchange Commission Act 1993. Subsequently, Companies Act 1913 was replaced by Companies Acts 1994, which is also applicable for MFIs (Hasan et al, 2019). Presently, the commercial sector in Bangladesh encompasses a small number of government-owned corporations, joint ventures, and multinational firms, as well as large numbers of privately-owned corporations and MFIs.…”

Section: Microfinance Board Practices In Bangladeshmentioning

confidence: 99%

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Effects of board independence on microfinance institutions’ performance: The case of Bangladesh

Hussain

Azhar

Rahman

2021

AJAP

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This study aims to examine the relationship between board independence and the performance of microfinance institutions (MFIs). Early studies on microfinance have made immense contributions, particularly in identifying the factors that influence performance. However, studies addressing board independence and its impact on performance remain scarce. Design/ Methodology/ Approach: This study utilised a panel dataset involving 80 MFIs in Bangladesh for the period of 2005-2018. A panel data regression technique was applied to measure the relationship between MFIs' performance and board independence based on the 80 cross-sectional MFIs with 13 years of data. Research findings: Our findings suggest that independent directors and board size facilitate MFIs to become financially sustainable. The findings also indicate that CEO duality enhances institutional sustainability but does not enhance outreach to the poor. While the results of this study partially support the proposition of stewardship theory, the proposition of agency theory is rejected. This indicates that MFIs in Bangladesh are operated by motivated agents with similar interests to the MFIs' owners. Theoretical contribution/ Originality: This investigation contributes to the microfinance governance literature by highlighting the argument that board independence reduces conflict between MFIs' principle and agent. This study also contributes to the global debate concerning CEO duality and MFIs' double bottom line performance from the perspective of a developing country, such as Bangladesh. Practitioner/ Policy implication: The practical implication of this research is on governance mechanisms in terms of their effectiveness, which is influenced by MFIs' competence. Since board members should promote stakeholders' interests rather than the interests of the organisation, there is a need for sound guiding principles that should form an integral part of the policy for better MFI governance practices. Limitation/ Implication: The limitation of this study mainly concerns the lack of evidence concerning whether or not every licensed MFI in Bangladesh has non-manageable stakeholders. Similarly, this study fails to capture the insolvency level of customers. Therefore, future studies may expand on this approach and create a measure for MFIs' outreach to the poor.

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Section: Theoretical Discussion and Hypothesis Developmentmentioning

confidence: 69%

Section: Microfinance Board Practices In Bangladeshmentioning

confidence: 99%

Section: Microfinance Board Practices In Bangladeshmentioning

confidence: 99%

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Effects of board independence on microfinance institutions’ performance: The case of Bangladesh

Hussain

Azhar

Rahman

2021

AJAP

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“…Hence, it is good to see that the interest is increasing on the gender diversity issues in these kind of countries (e.g. Hasan et. al., 2018;Abobakr and Elgiziry, 2017;Shetu and Ferdous, 2017;Badrul et.…”

Section: Introductionmentioning

confidence: 99%

Analysis of the Status of Women Directors: A Study on the Listed Financial Institutions of Bangladesh

Ferdous¹,

Rahman²

2019

IBR

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This paper investigates the status of women directors of Bangladesh using all the listed financial institutions of this country. Particularly, the paper considers three issues: the number of women working as directors, their qualification; and their recruitment process. Using a mixed method, the overall findings of the study reveals a very dissatisfactory status of the women in the top position in the Financial Institutions of Bangladesh. It also indicated that, though the number of qualified women is increasing but the rate of growth is slow like many other countries. The patriarchal society and the socio-cultural factors are still dominating the recruitment process of women as a director. Though the overall findings show a sluggish growth of the status of women at the top position, the findings of this study indicate the gap in understanding of the policy makers and also among women, which will help in developing effective policies for ensuring gender diversity at the board level.

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“…While the majority of the MFIs registered as Non-Governmental Organizations (NGOs), a large number of MFIs registered as commercial banks, cooperatives, credit unions, nonbank financial institutions, or rural banks. MFIs depend on their donors for funds and the donors depend on MFI's for reputation and to some extent attaining their social goals(Hasan et al, 2018).…”

mentioning

confidence: 99%

Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction

Uddin

Hamdan

Embi

et al. 2020

ihcd

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The purpose of this paper is to compare three different models of MFIs, namely microfinance banks (MFB), Microcredit programme (MCP) and rural development scheme (RDS), by focusing on their governance structures, and subsequently analyse their implications on social impact and poverty reduction of the MFIs. Three MFIs, one from each model, will be considered, using Bangladesh as the case study. Bangladesh is a country which is considered to be a pioneer in providing micro-finance to the underprivileged people to improve their entrepreneurial capacity. In methodology, the study relies on Porter's Competitive Strategy Theory (1979). This theory is based on the concept that five forces determine the competitive intensity and attractiveness of a market which assesses five forces. The study relies on secondary data collected mainly from the annual reports of the three MFIs, and Microcredit Regulatory Authority (MRA) report. This study aims to contribute towards better governance practices of the MFIs given its strong implications on social responsibility, accountability, transparency, financial performance, increasing their social impact and poverty reduction of the MFIs. Findings of this study provide essential inputs on the way forward for the evolution of microfinance, as framed by the global development discourse and subsequent public policy choices. Overall, the study shows that only a limited number of variables influence the social impact and poverty reduction of an MFI. The limitation of the studied investment fund is that it invests in expanding and mature MFI's. So the

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Role of governance on performance of microfinance institutions in Bangladesh

Cited by 25 publications

References 39 publications

Effects of board independence on microfinance institutions’ performance: The case of Bangladesh

Effects of board independence on microfinance institutions’ performance: The case of Bangladesh

Analysis of the Status of Women Directors: A Study on the Listed Financial Institutions of Bangladesh

Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction

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