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Effects of Corporate Governance on Delinquency Management of Microfinance Banks in Southwest, Nigeria

Year: 2020

Type: article

Abstract: The study investigated the effects of corporate governance on delinquency management of microfinance banks in Nigeria with the aim to examine the impact of board size and board composition on delinquency management.The study applied Static panel regression estimate which involved pooled regression, fixed effect estimate, random effect estimate, Hausman test as the main estimation technique.Data on corporate governance (proxied by board size and board composition) and delinquency management (proxied by default rate) were obtained from Annual Financial Statement of respective microfinance banks over a period of seven (7) years from 2012 to 2018).The result revealed that board size has negative and significant effect on default rate and board composition has a negative and an insignificant effect on default rate.The result implies that bank managers should increase their board size with more management skills and professionalism, making it very difficult for the CEO to manipulate the board.The study concluded that corporate governance has negative effect on delinquency management of microfinance banks in Nigeria.The study recommended that management of microfinance banks should regulate the size of the board which should not be too large and must consist of highly skilled and competent professionals who are conversant with oversight function.

Source: International Journal of Academic Research in Business and Social Sciences

DOI: 10.6007/ijarbss/v10-i5/7215

Authors: Rasheed Alade Abdulai, Mojisola Abere, Samson Oluwole Olowo

Institutions: The Polytechnic Ibadan, Ekiti State University

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: diamond

OpenAlex ID: W3049030516