Governance and Efficiency of Microfinance Institutions: Empirical Evidence from Sri Lanka

Using a sample of Sri Lankan microfinance institutions (MFIs), we investigate the impact of several governance mechanisms on MFI efficiency, expressed in terms of the latter’s dual objectives of financial sustainability and outreach. Results reveal that smaller and gender-diverse boards have a positive impact on financial efficiency. Results also show that MFIs in which the chief executive officer (CEO) chairs the board and a woman holds the CEO position are less efficient in terms of poverty outreach.