Microfinance Governance: Establishing a Base for Sustainable Development for the Poor Mohammad Delwar Hussain Source Title: Modern Corporate Governance Strategies for Sustainable Value Creation (/book/modern-corporate-governance-strategies- sustainable/345355) Copyright: © 2025 Pages: 24 DOI: 10.4018/979-8-3693-6750-6.ch016 OnDemand: (Individual Chapters) $33.75 List Price: $37.50 () Current Special Offers Available   Abstract The only financial sector where stakeholders may gain from both poverty alleviation and sustainability is microfinance. Microfinance practitioners argue that the absence of governance standards in microfinance institutions (MFIs) is the reason for this dual role. The focus will be on understanding how effective governance can enhance the performance and sustainability of MFIs, ensure accountability, and protect the interests of stakeholders, including borrowers, investors, and the community. The focus of this research is on data from a frontier market economy, and the research framework takes into account multiple theories, including three management-based theories (resource dependence, stakeholder, and stewardship) and the economic-based agency theory. The chapter will provide a blend of theoretical insights, practical examples, and case studies to offer a comprehensive understanding of the critical role governance plays in the microfinance sector. It was discovered that the profitability of MFI has a non-linear impact on its services for the impoverished, taking into account both “social-welfare and commercial logic.” MFIs' outreach typically declines when they aim for large profits. Consequently, the study's conclusions recommend creating a governance handbook that prioritizes social welfare reasoning while increasing MFI services for clients who are less fortunate. It is also necessary to generate institutional structures and separate governance guideline, based on the social welfare logic. As part of their responsibility to ensure that the MFIs adhere to the social mission, the microfinance board of directors may designate a social director. These directors have been acting on behalf of the MFIs' clients. Chapter Preview Complete Chapter List Search this Book: Full text search terms Reset Editorial Advisory Board View Full PDF (/pdf.aspx? tid=363065&ptid=345355&ctid=15&t=Editorial Advisory Board&isxn=9798369367506) Table of Contents View Full PDF (/pdf.aspx? tid=363066&ptid=345355&ctid=15&t=Table of Contents&isxn=9798369367506) Detailed Table of Contents View Full PDF (/pdf.aspx? tid=363067&ptid=345355&ctid=15&t=Detailed Table of Contents&isxn=9798369367506) Preface Slimane Ed-Dafali, Fahri Özsungur, Muhammad Mohiuddin View Full PDF (/pdf.aspx? tid=363068&ptid=345355&ctid=15&t=Preface&isxn=9798369367506) 11/30/24, 2:13 PM Microfinance Governance: Establishing a Base for Sustainable Development for the Poor: Business & Management Book Ch… https://www.igi-global.com/chapter/microfinance-governance/363084 1/7