BOARD GENDER DIVERSITY AND FINANCIAL INCLUSION: EVIDENCE FROM THE GLOBAL MICROFINANCE INDUSTRY

Abstract

This study examines the effect of board gender diversity within Microfinance Institutions (MFIs) on their ability to acquire new borrowers, a key indicator of progress toward achieving the financial inclusion agenda of the Sustainable Development Goals (SDGs). Utilizing an unbalanced panel dataset consisting of 1,450 unique MFIs operating in 106 countries over the period of 2010–2018, this study deployed various econometric models, including the Pooled Ordinary Least Squares (POLS), Random Effects Model (REM), and Fixed Effects Model (FEM). Rigorous measures, including endogeneity-corrected techniques, alternative proxies for board gender diversity such as the BLAU index and sub-sample analyses were applied to ensure the reliability and robustness of our results. The study’s findings indicated a positive association between board gender diversity and financial inclusion within MFIs. However, the statistical significance of these outcomes varied depending on the specific analytical techniques, sub-samples, and alternative proxies used during the research. Overall, this study offers implications for practitioners and policymakers, encouraging women’s participation in the boardrooms of MFIs to advance the financial inclusion agenda of the SDGs.