Role of corporate governance on the performance of microfinance institutions(MFIs):

A case study on selected MFIs of Bangladesh
Chowdhury Monir Hossain
Young-Kyun Song
국제대학원 국제경영학과
Graduate School of International Studies Ajou University
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Alternative Abstract
This research explores and explains the relationship between corporate governance and performance of Microfinance Institutes (MFIs) in Bangladesh utilizing an in-depth qualitative case study. Rapid growth in the microfinance industry and MFIs’ transformation into regulated entities capturing savings and deposits demands clear articulation of effective corporate governance. Notwithstanding its significance, there is a paucity of scholarly work on this issue, the existing ones not being able to take MFIs specific issues into account and dig deeper into the issue to facilitate the understanding of the intricacy of the mechanism. Thus, till there exists vacuum in the area of in-depth analysis of MFIs governance mechanism and performance. This is essential because unlike general financial institutions created with a single objective of making profits, MFIs often have diversified functions, microcredit operations being one of those functions. Moreover, the source of financing also influences the governance mechanism of MFI. Taking all these issues together, this research focuses on more nuanced in-depth analysis of selected number of MFIs. This thesis takes four of the leading microfinance institutions of Bangladesh and their respective governance mechanism along with their performances as the unit of analysis. The country still leads the global microfinance industry both in terms of its sheer size and productivity. This research found evidences that, although the MFIs industry in Bangladesh has commendable success, and the selected MFIs are indeed performing very well so far the MFIs dual mission are concerned, still there is ample scope for improving the corporate governance practices, and institutionalizing those norms owing to the fact that most of the MFIs have increased focus on sustainability. It was also evident that, even for very large and seemingly well established MFI like Grameen Bank, governance crisis may pose significant threat. The regulatory authority does not have enough teeth to have efficient mechanism for supervision. The MFIs suffer from “founder syndrome” which should be neutralized by adopting appropriate succession plan. As many NGO-MFIs are undergoing transition, while large MFIs are venturing increasingly on profitable projects, the financial restructuring should be done very carefully, so that the double bottom line can be maintained.

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Special Graduate Schools > Graduate School of International Studies > Department of International Business > International Business > 3. Theses(Master)
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