Corporate governance: The role of the board of directors in Microfinance Intermediary Financial Institutions (IFIM)

Abstract

This article proposes, from a legal perspective, the role performed by the Board of Directors in the implementation of corporate governance practices in Microfinance Intermediary Financial Institutions (IFIM), as a means that allows the effective compliance of its strategic objectives and the strengthening its financial and social work, in such a way that it directly contributes to the financial inclusion of those social groups that do not have access to financial services through traditional banking. In this sense, good governance in the IFIs will promote the trust and transparency of credit institutions, an efficient design of their financial products, technological innovation, and better risk assessment and management. In this way, these governance practices will contribute to strengthening its reputation and improving its position in the market. Taking into account the negative impact that a governance crisis could cause in the institutions that operate in the microfinance sector, a market with a strong focus on social performance, mainly oriented towards promoting the financial inclusion of marginalized groups, is necessary and opportune to do a survey to determine if the IFIs, voluntarily registered in the National Registry of IFIs of the National Microfinance Commission (CONAMI) of Nicaragua, have an ideal legal framework that provides them with the necessary guidelines to implement good practices in governance matters corporate, or if the domestic regulation establishes limitations for its implementation from the self-regulation.