CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE OF MICROFINANCE BANKS IN NIGERIA

This study investigates the relationship between corporate governance practices and the financial performance of microfinance banks (MFBs) in Nigeria. Given the vital role MFBs play in promoting financial inclusion and supporting small-scale enterprises, effective governance structures are essential for their sustainability and profitability. The research examines key governance variables such as board size, board independence, audit committee effectiveness, and ownership structure, and their influence on financial performance indicators including return on assets (ROA), return on equity (ROE), and net profit margin. Data were collected from a sample of licensed MFBs across Nigeria over a five-year period using secondary sources such as annual reports and regulatory filings. The findings reveal a significant positive relationship between sound corporate governance and improved financial performance, emphasizing the importance of regulatory compliance, transparency, and accountability. The study concludes that strengthening governance frameworks in the microfinance sector can enhance operational efficiency, investor confidence, and long-term sustainability. Policy recommendations are provided to guide stakeholders in promoting robust governance systems tailored to the unique needs of Nigerian MFBs.