Email this article 
Hide
Show all
Original Research
The determinants of capital structure of microfinance institutions in Ghana
Submitted: 04 April 2013 | Published: 09 April 2013
About the author(s)
Anthony Kyereboah-Coleman, University of Ghana Business SchoolFull Text:
PDF (218KB)Abstract
Using a panel data methodology, this study examines the determinants of capital structure of 52 microfinance institutions (MFIs) in Ghana. The empirical results show that the MFIs are highly leveraged and that their capital structure is explained partly by standard finance theory and by other unconventional variables. Specifically, the study confirms that leverage is positively related to asset tangibility, with small MFIs using short-term and large MFIs using long-term debt. Though, the findings confirm that leverage is inversely related to risk, they also suggest that some MFIs enjoy long-term debt in spite of risk, while profitability is irrelevant in explaining the capital structure decisions of MFIs. Finally, the study shows that the reputation and board independence of MFIs significantly and positively affect their capital structure decisions.
Keywords
Metrics
Total abstract views: 6373Total article views: 5829
Crossref Citations
1. Debt Capital Structure and Credit Information Sharing: Evidence on Listed Firms from an Emerging Market
Baah Aye Kusi, Gloria Dzeha, Kwadwo Kwakye Gyan, Festus Ebo Turkson
Journal of African Business vol: 22 issue: 2 first page: 153 year: 2021
doi: 10.1080/15228916.2020.1745010
2. Corporate governance compliance practices and financial performance of listed companies in the emerging market
Isaac Francis Antwi, Carla Carvalho, Cecília Carmo, Eric Nkansah
Business Performance Review vol: 3 issue: 2 first page: 119 year: 2025
doi: 10.22495/bprv3i2p10
3. Foreign Direct Investment and Firm Value: Evidence from Selected Countries in Sub-Saharan Africa
Joseph Dery Nyeadi
Journal of African Business vol: 24 issue: 2 first page: 260 year: 2023
doi: 10.1080/15228916.2022.2042079
4. Microfinance governance: a systematic review and future research directions
Md. Ali Rasel, Sandar Win
Journal of Economic Studies vol: 47 issue: 7 first page: 1811 year: 2020
doi: 10.1108/JES-03-2019-0109
5. Determinants of the capital structure of Portuguese firms with investments in Angola
Jorge H.F. Mota, Antonio C. Moreira
South African Journal of Economic and Management Sciences vol: 20 issue: 1 year: 2017
doi: 10.4102/sajems.v20i1.885
6. Loan Portfolio Quality of Microfinance Institutions in Uganda: A Qualitative Assessment
Ester Agasha, Gladness Monametsi, Tshepo Feela
Journal of Financial Risk Management vol: 09 issue: 02 first page: 155 year: 2020
doi: 10.4236/jfrm.2020.92009
7. Effect of country level environmental, social and governance factors on firm performance in the Mauritian equity market
Ushad Subadar Agathee, Lydie Myriam Amelot
African Journal of Economic and Management Studies first page: 1 year: 2025
doi: 10.1108/AJEMS-03-2025-0159
8. Dynamic Model of Optimal Capital Structure: Evidence from Nigerian Listed Firms
Rubi Ahmad, Oyebola Fatima Etudaiye-Muhtar
Global Business Review vol: 18 issue: 3 first page: 590 year: 2017
doi: 10.1177/0972150917692068
9. Board gender diversity and debt utilization: Evidence from the global microfinance industry
Arpita Sharma, Swati Chauhan, Md Aslam Mia, Sunil Sangwan, Shoaib Alam Siddiqui, Sanjeev Kumar
Borsa Istanbul Review vol: 24 issue: 3 first page: 530 year: 2024
doi: 10.1016/j.bir.2024.02.012