The Effect of Boards on the Performance of Microfinance Institutions : Evidence from Tanzania and Kenya

"Although microfinance institutions (MFIs) are the most prominent providers of financial services to low-income people, their economic and social performance is subject to debate. How MFIs are governed is likely to affect their efficiency, outreach to the poor, sustainability, and impact on poverty alleviation. This study explores and examines the effects of the governing board on the social and financial performance of MFIs. The first phase of the study explores MFI board members’ awareness and perception of their roles and how this affected their participation in the board and their influence on it. The second phase examines the effect of specific board member characteristics (external representation, international source, education, and gender) on the economic and social performance of the MFI through a survey of 337 board members in Kenya and Tanzania."