Capital Structure and CEO Tenure in Microfinance Institutions
In this report, CEO tenure and the debt proportion of microfinance institutions (MFI) are examined. The report supports the notion that financing choices of MFIs have a direct correlation to the profile of their managers. Results in the report indicate CEO’s tenure as having a positive effect on MFI’s debt ratio. Key points highlighted in the report include:
- Microfinance institutions need improved access to debt capital to cover a huge and increasing world demand for microfinance services.
- More experienced CEOs may be more aligned with the microfinance institution’s mission and they may have a better understanding of the business model of microfinance.
- Capital providers may require a proven track record within the institution to supply funding.