Governance and Efficiency of Microfinance Institutions

  • Empirical Evidence from Sri Lanka
  • Patrick Van Damme, Mahinda Wijesiri, Michele Meoli
  • South Asia Economic Journal, July 2016, SAGE Publications
  • DOI: 10.1177/1391561416650102

How to make microfinance successful

What is it about?

In this paper, we investigated the impacts of several governance characteristics (i.e. board size, proportion of women on the board, duality and presence of a female CEO) simultaneously on MFIs’ performance. We measured efficiency in terms of the MFI's dual objectives of financial sustainability and outreach. We found that smaller and gender-diverse boards have a positive impact on MFI's financial efficiency.

Why is it important?

Findings of this study provide some insights to the policy makers to develop sound corporate governance system in order to improve the performance of microfinance programs. Although the generality of the results is limited given that the present study focuses on Sri Lankan MFIs, the policy implications derived can be applicable to MFIs operate elsewhere with similar socio-economic characteristics.

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The following have contributed to this page: prof. Patrick L.J. Van Damme and Dr Mahinda Wijesiri