IJEBMR
ISSN: 2456-7760

Title:
THE CRITICAL MASS HYPOTHESIS: EMPIRICAL EVIDENCE FROM THE MICROFINANCE INSTITUTIONS' BOARDS

Authors:
Tanweer Hasan, USA

Abstract:
The objective of the present study is to empirically test the validity of the critical mass hypothesis (Kanter, 1977a, 1977b) using data from the microfinance sector. A sample of ninety five microfinance institutions from Bangladesh is used in the present study. While majority of the clients in the microfinance sector are women it is known to have lack of women representation in the governing boards, both general and executive. The results reported in this study show convincing evidence that the predictions of the critical mass hypothesis hold up in the microfinance sector. The policy implication of this finding is to alert the regulators to focus on women representation in the governing boards - and possibly, mandate MFIs to have a critical mass of women in the governing boards instead of requiring some arbitrary number, as prevalent in many countries.

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