Financial performance of microfinance institutions: does gender diversity matters?

Abstract

Our study examines the relationship between gender diversity and financial performance of Sri Lankan microfinance institutions (MFIs). The OLS regression, fixed effect and random effect models are used to analyse an unbalanced panel data comprising 300 firm-year observations over the period 2007 to 2012. Our findings reveal that the institutions with female directors on the board have a significant negative effect on main financial performance but a significant positive relationship with the female CEOs and female chairpersons. We also find no significant relation between women leaders, operating cost and portfolio at risk 30 days of MFIs. This research provides insight for policy-makers regarding gender diversity on boards in Sri Lankan MFIs.