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Governance and Performance of Microfinance Institutions in Central and Eastern Europe and the Newly Independent States

By Valentina M. Hartarska


This paper presents the first evidence on the impact of board diversity and independence, and management compensation on outreach and sustainability of microfinance institutions in Central and Eastern Europe and the Newly Independent States. Results indicate that board diversity improves both outreach and sustainability while larger and less independent boards lower sustainability. Performance-based compensation is not effective in aligning the interest of managers and stakeholders, and underpaying managers reduces outreach.governance, microfinance, board of directors, managerial compensation, Financial Economics,

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