Religion and governance in microfinance institutions: evidence from the global microfinance industry

Abstract

This thesis sought to study the influence of religion on corporate governance in Microfinance Institutions. The study uses secondary data on a sample of rated Christian and secular MFIs compiled in rating reports by rating agencies to compare the governance differences and similarities between Christian and secular MFIs. The research uses the random effects General Least Squares and logistic regression models alongside other univariate statistical methods to test for the effect of religious affiliation on corporate governance. The overall findings indicate that Christian MFIs are significantly less-regulated by banking authorities in a country than secular MFIs and also Christian MFIs have a significant higher tendency to use the services of the big four external auditors (see table 4-3) than secular MFIs. Otherwise, the results revealed that Christian and secular MFIs are essentially similar in terms of board size, number of board meetings in a year, top management size, number of international directors, number of female directors, the probabilities of having a female CEO, CEO/Chairman duality, NGO or a Cooperative legal status and CEO with business experience and business education.