Internal Corporate Governance Structure and Financial Performance of Microfinance Institution in Ethiopia
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Date
2012-02
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A.A.U
Abstract
This thesis contains the findings of an examination of the relations ship between internal
Corporate governance stricter' and the financial performance of Ethiopian microfinance
Institutions, using a sample of 11 microfinance institutions' from the year 2006 to 2009 (a total of'
44 Microfinance institutions -year observations) The corporate governance data was collected
Directly from the microfinance institutions chief executive officer, a secretary o f board, and other
Board members, while the financial performance data was collected from the association of
Ethiopian microfinance institution's financial analysis report, the thesis seek to determine
Whether better-governed microfinance institution ions tend to be associated ,higher financial
Returns than their poorly-governed counterparts. The internal corporate governance – financial
Performance relation is investigated by applying the panel data regression analysis model. The
Results based on this regression analysis are mixed First board diversity in gender, the
frequency of board meeting and the existence of board committee has statically significant negative impact on financial performance of micro finance institution which was measured by return on asset (RAO) . Second board diversity in professional back ground. Percentage of share held by
Board members . board size and percentage of non executive director have no statistically significant impact on financial performance of microfinance institution which was measured by return on asset (RAO)
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Keywords
Corporate Governance, Performance of Microfinance