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Performance and governance in microfinance institutions

Author

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  • Roy Mersland

    (UIA - University of Agder)

  • R. Øystein Strøm

Abstract

We trace the relationship between firm performance and corporate governance in microfinance institutions (MFI) utilising a self constructed global data set on MFIs, collected from third-party rating agencies. We study the effect of board characteristics, ownership type, competition and regulation on the MFI's outreach to poor clients and its financial performance. The results show that split roles of CEO and chairman, a female CEO, and competition are important explanations. Larger board size decreases the average loan size while individual guaranteed loan increases it. No difference between nonprofit organisations and shareholder firms in financial performance and outreach is found.

Suggested Citation

  • Roy Mersland & R. Øystein Strøm, 2009. "Performance and governance in microfinance institutions," Post-Print hal-05217846, HAL.
    • Handle: RePEc:hal:journl:hal-05217846
    DOI: 10.1016/j.jbankfin.2008.11.009
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    • G3 - Financial Economics - - Corporate Finance and Governance

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