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

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 t...

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Autores principales:	Md Nazim Uddin, Hamdino Hamdan, Nor Azizan Che Embi, Salina Kassim, Norma Bt Md Saad
Formato:	article
Lenguaje:	AR EN TR
Publicado:	Ibn Haldun University 2020
Materias:	Governance Structure Microfinance Social Impact Microfinance Banks Rural Development Scheme Social Sciences H Language and Literature P Arts in general NX1-820
Acceso en línea:	https://doaj.org/article/2c2c35a6ef3f4a8fa5bff3264ba7a250
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spelling	oai:doaj.org-article:2c2c35a6ef3f4a8fa5bff3264ba7a2502021-11-18T17:44:16ZGovernance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction10.36657/ihcd.2020.682651-379Xhttps://doaj.org/article/2c2c35a6ef3f4a8fa5bff3264ba7a2502020-01-01T00:00:00Zhttps://journal.ihu.edu.tr/index.php/ihu1/article/view/91https://doaj.org/toc/2651-379XThe 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 results of this research can only be generalised to expanding and mature MFI’s. The approach to microfinance governance should be broadened by focusing more on stakeholders and the decision making process in an MFI. Better social responsibility and poverty reduction of the MFIs contribute positively to financial inclusion through poverty alleviation, empowerment of the poor and better financial access, leading to sustainable economic growth.Md Nazim UddinHamdino HamdanNor Azizan Che EmbiSalina KassimNorma Bt Md SaadIbn Haldun UniversityarticleGovernance StructureMicrofinanceSocial ImpactMicrofinance BanksRural Development SchemeSocial SciencesHLanguage and LiteraturePArts in generalNX1-820ARENTRİbn Haldun Çalışmaları Dergisi, Vol 5, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	AR EN TR
topic	Governance Structure Microfinance Social Impact Microfinance Banks Rural Development Scheme Social Sciences H Language and Literature P Arts in general NX1-820
spellingShingle	Governance Structure Microfinance Social Impact Microfinance Banks Rural Development Scheme Social Sciences H Language and Literature P Arts in general NX1-820 Md Nazim Uddin Hamdino Hamdan Nor Azizan Che Embi Salina Kassim Norma Bt Md Saad Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction
description	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 results of this research can only be generalised to expanding and mature MFI’s. The approach to microfinance governance should be broadened by focusing more on stakeholders and the decision making process in an MFI. Better social responsibility and poverty reduction of the MFIs contribute positively to financial inclusion through poverty alleviation, empowerment of the poor and better financial access, leading to sustainable economic growth.
format	article
author	Md Nazim Uddin Hamdino Hamdan Nor Azizan Che Embi Salina Kassim Norma Bt Md Saad
author_facet	Md Nazim Uddin Hamdino Hamdan Nor Azizan Che Embi Salina Kassim Norma Bt Md Saad
author_sort	Md Nazim Uddin
title	Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction
title_short	Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction
title_full	Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction
title_fullStr	Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction
title_full_unstemmed	Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction
title_sort	governance structure of microfinance institutions: a comparison of models and its implication on social impact and poverty reduction
publisher	Ibn Haldun University
publishDate	2020
url	https://doaj.org/article/2c2c35a6ef3f4a8fa5bff3264ba7a250
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Governance Structure of Microfinance Institutions: A Comparison of Models and Its Implication on Social Impact and Poverty Reduction

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