IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 8 2024
DOI: doi.org/10.56201/jafm.v10.no8.2024.pg447.458

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Assessing The Impact of Institutional Quality on Financial Performance: Evidence from Nigerian Microfinance Institutions

Abdulsalam Ahmed, Mohammed Yahya Murtala, Usakutiya Jeff Okundamiya

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Abstract

This study investigates the relationship between institutional quality and financial performance of microfinance institutions in Nigeria. Using a panel dataset of 89 microfinance institutions over a period of 2009 2018, we employ regression analysis to examine the effect of institutional quality on financial performance metric such as return on assets. Our findings suggest that institutional quality influences financial performance, with rule of law playing a crucial role. The study contributes to the existing literature by providing empirical evidence on the importance of institutional quality in the Nigerian microfinance sector. The results have implication for policymakers, regulators and microfinance practitioners seeking to improve financial stability and sustainability in the industry.

keywords:

Institutional quality, Microfinance institutions, Financial performance, Governance

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