Ngozi Okoye and Juliana Siwale
There have been various forms of regulatory intervention by the central banks of countries to streamline microfinance activities and ensure effective corporate governance of…
Abstract
Purpose
There have been various forms of regulatory intervention by the central banks of countries to streamline microfinance activities and ensure effective corporate governance of microfinance institutions (MFIs). Considering the limited amount of research in this area and the need to ensure regulatory effectiveness, the purpose of this paper is to evaluate the impact of regulatory provisions on the attainment of effective corporate governance in MFIs in Nigeria and Zambia.
Design/methodology/approach
Interviews were conducted with regulators at the Central Bank of Nigeria and the Bank of Zambia, directors and executive management officers of MFIs and executives of apex associations of MFIs in both countries.
Findings
The paper presents five significant findings which are that the regulations have enabled negative outcomes in areas such as board composition, the ownership requirements in the regulations have resulted in differing governance implications, the certification requirements for board members are problematic in practice, supervision by regulators is ineffective and has impacts on risk management and the principle of consultation with stakeholders is inadequate in both countries.
Practical implications
Regulatory provisions must be robust and fit for purpose to ensure the microfinance initiative in emerging economies achieves the objectives of enhancing financial inclusion and economic development of the society.
Originality/value
The paper addresses an area of limited research and provides empirical findings in relation to regulation and corporate governance in developing economies, which would help to ensure regulatory effectiveness.
Details
Keywords
Rob Dixon, John Ritchie and Juliana Siwale
The purpose of this research is to use an accountability framework to explain the emerging tensions in accountability and how an intended bottom‐up approach became progressively…
Abstract
Purpose
The purpose of this research is to use an accountability framework to explain the emerging tensions in accountability and how an intended bottom‐up approach became progressively supplanted. This paper is set within an emerging Zambian microfinance organisation moving into crisis.
Design/methodology/approach
A series of semi‐structured interviews were conducted with key local microfinance specialists, managers and accountants, clients and past and current loan officers. Live observation of the client‐loan officer interface and internal meetings provided triangulation on accountability relationships in the midst of crisis. Data were analysed using NVIVO, a qualitative computer software package.
Findings
The findings show that tensions between vertical and horizontal accountability in practice can be directly translated into heightened pressure and stresses on both the non‐governmental organisation (NGO) and its loan officers, which constrain overall accountabilities to other stakeholders and disguise other potential dysfunctions.
Research limitations/implications
This study focussed on accountability at the grassroots in microfinance NGOs with a social mission. It reveals potential for further personal, community and socially constituted accounting research within microfinance in particular.
Originality/value
The paper adds to the literature on NGO accountability. It will be of value to researchers and practitioners seeking to gain a better understanding of not‐for‐profit organisations whose goals are not primarily wealth creation. It also gives details on under‐researched areas in accounting, namely NGOs and poverty reduction, and practices in Sub‐Saharan Africa.