Towards an explanation of the failure of the internal governance system of microfinance institutions in the Democratic Republic of the Congo

Christian BUSHU Mbeetsa () and Serge DJOUM Kouomou ()

Journal of Academic Finance, 2025, vol. 16, issue 1, 52-73

Abstract:

Purpose: This study examines the internal governance system of microfinance institutions (MFIs) in the Democratic Republic of the Congo (DRC) to identify the reasons for their failure. The internal governance system is crucial for ensuring the transparency and efficiency of MFIs. \n

Methodology: We use a qualitative methodology with a sample of 15 MFIs in the provinces of Nord-Kivu and Sud-Kivu. These provinces represent approximately 60% of the microfinance sector in the country, and they have been selected for their maturity and the crises or dysfunctions they have experienced. Thematic content analysis was used to categorise the verbatims using NVivo 12 software. \n

Results: The results reveal seven categories of limitations in the internal governance system of MFIs in the DRC: regulatory and control, operational, commercial and financial, socio-political and economic, organizational and strategic, socio-cultural and technological. These dysfunctions have a negative impact on the performance and sustainability of MFIs. \n

Originality: This study makes an original contribution by identifying these seven constraints. It is essential to understand the factors that explain these dysfunctions in order to remedy the failure of the internal governance system and to support the crucial role of microfinance in the DRC.

JEL-codes: G3 M1 N8 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:jaf:journl:v:16:y:2025:i:1:n:898

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