A survey of relationship between corporate governance and performance in microfinance institutions in Kenya
The study was set to investigate the influence of corporate governance in the performance of micro-finance institutions in Kenya. The objectives of the study were to establish the relationship between corporate governance and financial performance of MFIs in Kenya and to determine the challenges facing MFIs in implementation of corporate governance principles. The study is significant because it can aid the policy makers in the formulation of policies, which can be effectively implemented for better and easier regulation of MFIs. The government can also use the study so as to come up with clear criteria of promoting MFIs in Kenya. The researchers and academic community use this study as a source of reference in future studies on MFIs. The management of the MFIs will gain from this study in making decisions regarding corporate governance. The survey design was found appropriate, given the small number of respondents targeted, time and resource limitations. The population of interest consists of all 15 MFIs registered as actively involved in MFI business. Open-ended and closed questions have been used in the questionnaires that are intended to capture both quantitative and qualitative data; the data collected was analyzed through the use of descriptive statistics. The study found out that there exist a relationship between different aspects of corporate governance and firm performance. Specifically, the study found out that the size of the board was positively correlated with turn-over or disbursements. This means that large boards translate to higher turn-over for MFIs.