Governance and Financial Performance of MFIs: An Empirical Check in the Beninese Context
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Considering the renewed emphasis laid on the governance issues these last ten years particularly in Beninese Microfinance Institutions (the MFIs), the objective of this research paper is to verify the existence of an empirical relation between the mechanisms of governance (both internal and external) and the financial performance of said MFIs based on a sample of 30 Beninese MFIs monitored over the course of 5 years, that is 150 observations. It ensues from the econometric analysis that, on one hand, the external mechanisms of governance play an important role in the financial performance of the Beninese MFIs while on the other hand, the internal mechanisms of governance only have little impact on the financial performance. Thus, the absence of significant effect of the internal mechanisms of governance requires to wonder about the determiners of the efficiency of boards of directors in MFIs.
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