Title: Effectiveness of microfinance institutions: the importance of women CEOs and corporate governance

Authors: Fatiha Brahmi; Salma Louati; Mouna Boujelbene

Addresses: Faculty of Economics and Management, Research Unit of Applied Economics, P.O. Box 24, 3042, Sfax, Tunisia ' Faculty of Economics and Management, Research Unit of Applied Economics, P.O. Box 24, 3042, Sfax, Tunisia ' Faculty of Economics and Management, Research Unit of Applied Economics, P.O. Box 24, 3042, Sfax, Tunisia

Abstract: This paper seeks to provide a framework to address the factors that help microfinance institutions (MFIs) achieve their goals. First, it examines the role of women managers' effectiveness and its subsequent impact on the financial stability and social performance of MFIs. Second, it questions corporate governance as a cornerstone of their success. To achieve this purpose, this research assesses the quality of IMF's corporate governance by constructing a governance index including 12 characteristics. Then, it evaluates the impact of women's leadership and corporate governance on the financial and social performance of MFIs. Using a dynamic simultaneous equation model, the results show that MFIs run by women are more effective in serving more borrowers without jeopardising their financial sustainability. Furthermore, better governance is the second most important factor that stimulates MFIs to improve their social and financial performance.

Keywords: female leadership; corporate governance index; financial stability; social performance; MFIs; microfinance institutions.

DOI: 10.1504/IJMEF.2024.144415

International Journal of Monetary Economics and Finance, 2024 Vol.17 No.6, pp.447 - 468

Received: 17 Feb 2023
Accepted: 01 Dec 2023
Published online: 12 Feb 2025 *

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