Internal controls, corporate governance and fi nancial performance of MFIs in Uganda
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Date
2022-12
Journal Title
Journal ISSN
Volume Title
Publisher
Kabale University Interdisciplinary Research Journal (KURJ
Abstract
The article reconnoitered the rapport between internal controls, corporate governance and
financial performance of MFIs in Uganda a case of Central Uganda. The study adopted a
descriptive, cross-sectional and correlational design. The study covered 76 MFIs in Uganda
with 332 respondents. The findings argument to a significant positive relationship between
internal controls, corporate governance and financial performance of MFIs. Internal Controls
and financial performance of MFIs (r = 0.651, P-value = 0.000), corporate governance and
financial performance of MFIs (r = 0.562, P-value = 0.000). From the results, we sanction
that internal controls, corporate governance, predict over 70.2% of the change in financial
performance of Micro Finance Institutions in Uganda. The findings display a good model
fit and fig.2 defines the model of internal controls and corporate governance on financial
performance of MFIs in Uganda and is comprised of 3 magnitudes of Internal Controls in
terms of Control Environment, Control Activities, Risk Assessment as well as corporate
governance and their predictive power on financial performance of MFIs in Uganda. Figure
2 and table 1 and 2 clearly indicate that Internal Controls and Corporate Governance are
significantly associated with financial performance of MFIs. The study spoke to pragmatic
issues that have not been shielded in the literature, more especially in the microfinance
industry Uganda. Besides, the study has attempted to negate or confirm whether the
theoretical underpinnings are empirically supported in Microfinance Institutions in Uganda.
Consequently, the study has underwritten to the lasting internal controls and corporate
governance debate in the field of financial industry. The study has further established that
internal control and corporate governance magnitudes operate in a synergic way to affect
financial performance in Microfinance Institutions in Uganda.
Description
Keywords
Internal Controls,, Corporate governance,, Financial Performance,, MFIs, Uganda