Impact of stakeholders as board members on sustainability and social outreach of microfinance institutions in developing markets

International Journal of Managerial and Financial Accounting (IJMFA), Vol. 15, No. 1, 2023

2 Pages Posted: 2 Mar 2020 Last revised: 27 Nov 2023

See all articles by Mohammad Delwar Hussain

Mohammad Delwar Hussain

Green University of Bangladesh - School of Business

Iftekhar Ahmed

Newcastle University

Muhammad Mohiuddin

Université Laval

Md. Tareq Hossain

affiliation not provided to SSRN

Date Written: February 4, 2020

Abstract

The purpose of this study is to explore how stakeholders on the board contribute to sustainability and outreach of microfinance institutions (MFI). Stakeholders as board members can influence the social outreach and sustainability of microfinance institutions (MFIs). By applying a multi-theoretical approach to a longitudinal dataset from a developing country perspective, this study analyses stakeholder involvement on the MFI board and its impact on double-bottom-line performance. The results suggest that independent directors on the board have significantly positive effects on achieving microfinance institutions' dual missions: sustainability and outreach. However, some stakeholders have produced mixed results. Employees, donors, and female board members play significant roles, although their impacts are moderated by the age and size of MFIs. CEO duality contributes to MFI sustainability but inversely affects outreach. The results support the stakeholder, stewardship, and resource dependence theories. This study recommends the appointment of an independent board member as a social director to widen the range of stakeholders' involvement in the boards of MFIs and contribute to achieving its objectives in a developing market context.

Keywords: Bangladesh, Governance, Microfinance, Stakeholders

Suggested Citation

Delwar Hussain, Mohammad and Ahmed, Iftekhar and Mohiuddin, Muhammad and Hossain, Md. Tareq Bin, Impact of stakeholders as board members on sustainability and social outreach of microfinance institutions in developing markets (February 4, 2020). International Journal of Managerial and Financial Accounting (IJMFA), Vol. 15, No. 1, 2023, Available at SSRN: https://ssrn.com/abstract=3531819 or http://dx.doi.org/10.2139/ssrn.3531819

Mohammad Delwar Hussain (Contact Author)

Green University of Bangladesh - School of Business ( email )

220/D, Begum Rokeya Sarani
West Kafrul, Dhaka 1207
Bangladesh

Iftekhar Ahmed

Newcastle University ( email )

Newcastle upon Tyne
NE1 7RU
United Kingdom

Muhammad Mohiuddin

Université Laval ( email )

Quebec City, Quebec
Canada

Md. Tareq Bin Hossain

affiliation not provided to SSRN

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
104
Abstract Views
731
Rank
466,166
PlumX Metrics