Relationship Between Corporate Governance Principles and Organization Performance in Microfinance Banks: A Case of Remu Microfinance Bank Limited

Abstract

Absence of good corporate governance practices as argued is major cause of organizational failure. The study sought to investigate the relationship between corporate governance principles and organizational performance in microfinance banks using a Case of REMU Microfinance Bank Limited. The study used a descriptive research design. The study was guided by the following objectives; to find out the corporate governance principles adopted in the organization, to establish the measures of organisational performance and to examine the relationship between corporate governance principles and organization performance. The study sampled a total of 76 respondents. Data was collected using a closed-ended questionnaire and the analysis of data was done by Statistical Package of Social Sciences (SPSS)- (Version 23). The key findings showed that there was equitable treatment of shareholders at REMU Microfinance as agreed and strongly agreed by 40.4% and 29.8% of the respondents. REMU Micro-finance was also found to be aware of and respects shareholder’s rights by allowing them access to relevant, sufficient and reliable information on a timely and regular basis as 55.3% and strongly agreed by 32.6% of the respondents. Additionally, the study also established that there was a significant relationship on the increase in organisational growth and goal achievement as agreed by 50.0% and 39.7% of the respondents respectively on average. The study recommends that the management reviews shareholder size and customer base as measures of organizational performance.