| Abstract: | The main objective of the study was to examine the effect of corporate governance on Financial performance (sustainability) and Social performance (outreach) of Microfinance institution in Ethiopia from (2016- 2020). Explanatory research design has been used to investigate the causal association between the independent and dependent variable. The study was based on both primary and secondary data, and the primary Data was collected via Questionnaires that targets chief executive directors and other relevant high officials of sample microfinance institution, whereas, the secondary data was collected from national bank of Ethiopia and Association of Microfinance Institution (AEMFI). Corporate governance variable used in this study was board Size, gender diversity, frequency of meeting, board member educational qualification, and board experience in finance and, audit committee size. The study also used MFI size and AGE as a control variable. Return on asset and Number of credit client was used as a proxyfor financial and social performance respectively,based on Random effect GLS regression,The result shows that board size, educational qualification, and board experience are better for enhancement of financial performance, whereas gender diversity and frequency of meeting are better in reaching poor client. Thereforethe study recommends that board size should be occupied with a range of expertise,skill, and competencywith proportional number of female to make better decisions andto monitor managers for better financial performance of the institutions,simultaneously to reach poor clients. |
