A Study on Awareness Towards Corporate Governance and its Dimensions Among the Microfinance Institutions

In recent years, the notion of corporate governance has garnered significant attention; nonetheless, its implementation and comprehension have been inadequate and inconsistent among the majority of Microfinance Institutions (MFIs). Corporate governance frameworks are of paramount importance as they help ensure sustainable development, efficiency, accountability, and transparency of any financial institution. The study aims is to assess the current level of awareness towards corporate governance and its dimensions in Microfinance institutions.150 respondents were recruited from the population using the Simple Random Sampling technique. Five-Point Likert scale measurement tool is used to determine the level of awareness that the respondents have regarding corporate governance and its various dimensions in microfinance institutions. This is a significant gap not only in their effectiveness in their functional operations but in terms of their capacity for trust and for obtaining funds and investments. Corporatization in MFIs comprises issues such as the board of directors, relationships with other players, corporate risks, information disclosure, and integrity. The research finds that there are several issues that put many MFIs off course when it comes to good governance practices. These include inadequate resources, poor training, and poor legislation that did not address their need. Furthermore, most MFIs are small organizations or have a strong local focus; they may not adhere to the best of formal governance structures. This conflict does not only retard their growth but also opens them up to other catastrophes like; poor handling of their cash, embezzlement, and damaging their reputation.