Comparative Analysis of Microfinance Governance: Implications for Impact of Social Inequality and Poverty Reduction

Abstract

The chapter looks at the challenges of microfinance governance, namely how to balance the interests of the poor with neoliberal governmentality, poverty rates, and Bangladesh’s unique challenges. The study closes the information gap regarding the impact of microfinance governance systems on poverty alleviation, financial performance, sustainability, and social effects. The literature evaluation covers the Impact of COVID-19 and climatic shocks on rural welfare, MFI financial sustainability, and microfinance empowerment. A qualitative and quantitative analysis of secondary data from MFI annual reports, publications from the Microcredit Regulatory Authority, and relevant literature is done using Porter’s Competitive Strategy Theory. The research found that MFIs need inclusive governance with stakeholder viewpoints to fight poverty and improve social responsibility. It reveals Bangladeshi MFIs have decreased poverty and increased financial inclusion, but more strategic governance improvements are required for optimum benefit. MFIs should reduce borrowing and budget deficits, combine Qardhasan and Zakat, and prioritize income-generating activities before lending. This study shows how governance affects MFI performance and emphasizes the necessity for strategic adjustments to eliminate poverty and social inequity. The research found that Bangladeshi MFIs must balance poverty alleviation and financial viability. Future laws should protect microfinance’s goals from profit maximization.