Combined effects of governance mechanism on the performance of microfinance institutions in Cameroon
DOI:
https://doi.org/10.59051/joaf.v11i1.324Keywords:
combined effects; governance; performance; microfinanceAbstract
The objective of this article is to analyse the interactions of governance mechanisms in order to identify the combinations that can improve or deteriorate the performance of microfinance institutions. To achieve this objective, a multiple regression was applied on the data collected from a sample of sixty-two Cameroonian microfinance institutions. The results show that private microfinance institutions must have large boards of directors, this would allow them to focus on group loans and the rate of financial intermediation on the one hand and, on the other hand, to benefit from the multiple skills of administrators in order to improve their performance. In addition, the results show that in the presence of female directors, group lending and the rate of financial intermediation significantly improve the IMF’s social performance. On the other hand, in the presence of women on the board, the rate of financial intermediation deteriorates financial performance when measured by the return on assets.
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References
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Zajac, E. J. et Westphal, J. D. (1994), « The costs and benefits of managerial incentives and monitoring in large US corporations: When is more not better? » Strategic Management Journal, Vol. 1, NO 5, pp. 121-142.
Booth J. R., et Cornett M. M. (2002), « Boards of directors, ownership, and regulation », Journal of Banking and Finance, Vol. 26 NO. 4, pp.1973–1996
Brambor T., Clark W. R. et Golder M. (2005), « Understanding Interaction Models: Improving Empirical Analyses », Political Analysis Review, Vol. 14, No. 1, pp. 63 -82
Galema R., Lensink R. et Mersland R. (2012), « Do powerful CEOs determine microfinance performance? » Journal of Management Studies, Vol. 49, NO. 4, pp 718- 742.
Hartarska V. (2005), « Governance and performance of microfinance institutions in Central and Eastern Europe and the newly independent states ». World Development, Vol. 33, NO. 10, pp.1627 -1643.
Hartarska V. et Mersland R. (2009), « Which Governance Mechanisms Promote Efficiency in Reaching Poor Clients? Evidence from rated microfinance Institutions », European Financial Management, Vol.18, NO. 2, pp. 218 -239.
Hartarska V. et Nadolnyak D., (2008), « Does rating help microfinance institutions raise funds? Cross-country evidence », International Review of Economics and Finance, vol. 17, N° 4, pp. 558 – 571.
Hermes, N. et Lensink, R. (2007), « The Empirics of Microfinance: What Do We Know? » Economic Journal, Vol. 1, NO. 17, pp. F1-F10.
Hoskisson R. E., Castleton, M. W., et Withers M. C. (2009), « Complementarity in monitoring and bonding: More intense monitoring leads to higher executive compensation », Academy of Management Perspectives, Vol23, NO. 7, pp. 57-74
Jensen M.C et Meckling W. H., (1976), « Theory of the firm, managerial behaviour, agency costs and ownership structure », Journal of Financial Economics, Vol. 3, NO. 4, pp. 305 -360.
Jensen, M. C. (1993), « The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems », Journal of Applied Corporate Finance Vol. 6, NO. 4, pp. 21-40
Lanha M. (2011), « Le prêt de groupe de caution solidaire: efficacité et enjeux », revue d'économie théorique et appliquée, vol. 1 NO. 2, pp 41-52
Ledgerwood J. et White V. (2006). « Transforming Microfinance Institutions: Providing Full Financial Services to Poor », The World Bank Publications,
Mahrani M. et Soewarno N. (2018), « The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable », Asian journal of accounting research, vol. 3 NO 1, pp. 41-60
Mersland R. and Strøm R. (2009), « Performance and governance in microfinance institutions », Journal of Banking and Finance, 2009, vol. 33, NO 4, pp 662-669
Messomo E. S. (2013b), « Réglementation et inclusion financière en microfinance au Cameroun. In la microfinance contemporaine-défis et perspectives », Première édition France: presse universitaire de Rouen et du havre
Rahayati A. K., Roshima S. et Syahiza A. (2017), « The board governance mechanism and the effect of concentration ownership on Malaysia companies performance », International journal of academic research in business and social sciences, vol. 7, NO. 2, pp222-699
Schepker, D. J. et Oh, W. Y. (2013), « Complementary or substitutive effects? Corporate governance mechanisms and poison pill repeal », Journal of Management, Vol. 3, NO 9, pp.1729-1759.
Tchakoute T. H. et Nekhili M. (2012), « Gestion des risques et performance des institutions de microfinance », Revue d'économie industrielle, Vol. 1, NO 3, pp. 121-142.
Wong-Yong Oh, Kyun C. et Kyun T. (2016), « Complementary or Substitutive Effects? Corporate Governance Mechanisms and Corporate Social Responsibility », Journal of Management, vol 2, NO 2, pp.141-175
Yoshikawa T., Zhu H. et Wang P. (2014), « National governance system, corporate ownership, and roles of outside directors: A corporate governance bundle perspective », Corporate Governance: An International Review, vol 2, NO 5, pp. 252-265.
Zajac, E. J. et Westphal, J. D. (1994), « The costs and benefits of managerial incentives and monitoring in large US corporations: When is more not better? » Strategic Management Journal, Vol. 1, NO 5, pp. 121-142.
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Published
2020-06-30
How to Cite
DJOUFOUET, F. W. ., & NZONGANG, J. . (2020). Combined effects of governance mechanism on the performance of microfinance institutions in Cameroon. Journal of Academic Finance, 11(1), 22–32. https://doi.org/10.59051/joaf.v11i1.324
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