Corporate Governance Challenges in Microfinance

Good corporate governance can improve firm performance and help assure long-term firm survival. Most providers of microfinance struggle to become financially self-sufficient and to achieve their social objectives of servicing with quality the poorest clientele possible. The issue of corporate governance has therefore been of increasing interest for microfinance as it is today considered to be one of the weakest areas in the industry. This paper aims to (i) inform the reader about what constitutes governance in relation to microfinance; (ii) identify the reasons why it is of such high importance for the industry; (iii) review existing academic research on microfinance governance; and (iv) highlight ideas on how to tackle corporate governance issues in microfinance properly. Moreover, a new research agenda is proposed