Microfinance regulation and effective corporate governance in Nigeria and Zambia

Okoye, N and Siwale, J ORCID: 0000-0002-6315-0896, 2017. Microfinance regulation and effective corporate governance in Nigeria and Zambia. International Journal of Law and Management, 59 (1), pp. 102-121. ISSN 1754-243X

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Abstract

Purpose: There have been various forms of regulatory intervention by the central banks of countries in order to streamline microfinance activities and ensure effective corporate governance of microfinance institutions. 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 microfinance institutions in Nigeria and Zambia. Methodology: Interviews were conducted with regulators at the Central Bank of Nigeria and the Bank of Zambia, directors and executive management officers of microfinance institutions, and executives of apex associations of microfinance institutions in both countries. Findings: The paper presents 5 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 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 in order 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.

Item Type: Journal article
Publication Title: International Journal of Law and Management
Creators: Okoye, N. and Siwale, J.
Publisher: Emerald
Date: 2017
Volume: 59
Number: 1
ISSN: 1754-243X
Identifiers:
NumberType
10.1108/IJLMA-06-2016-0054DOI
Divisions: Schools > Nottingham Business School
Depositing User: Jonathan Gallacher
Date Added: 20 Mar 2017 09:20
Last Modified: 09 Jun 2017 14:13
URI: http://irep.ntu.ac.uk/id/eprint/30412

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