The determinants of capital structure of microfinance institutions in Ghana
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 unconv...
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| Format: | Article |
| Language: | English |
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AOSIS
2013-04-01
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| Series: | South African Journal of Economic and Management Sciences |
| Online Access: | https://sajems.org/index.php/sajems/article/view/587 |
| _version_ | 1819211002412007424 |
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| author | Anthony Kyereboah-Coleman |
| author_facet | Anthony Kyereboah-Coleman |
| author_sort | Anthony Kyereboah-Coleman |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-12-23T06:20:09Z |
| format | Article |
| id | doaj.art-392f3121c92b4403a44e691d80f1bb13 |
| institution | Directory Open Access Journal |
| issn | 1015-8812 2222-3436 |
| language | English |
| last_indexed | 2024-12-23T06:20:09Z |
| publishDate | 2013-04-01 |
| publisher | AOSIS |
| record_format | Article |
| series | South African Journal of Economic and Management Sciences |
| spelling | doaj.art-392f3121c92b4403a44e691d80f1bb132022-12-21T17:57:13ZengAOSISSouth African Journal of Economic and Management Sciences1015-88122222-34362013-04-0110227027910.4102/sajems.v10i2.587200The determinants of capital structure of microfinance institutions in GhanaAnthony Kyereboah-Coleman0University of Ghana Business SchoolUsing 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.https://sajems.org/index.php/sajems/article/view/587 |
| spellingShingle | Anthony Kyereboah-Coleman The determinants of capital structure of microfinance institutions in Ghana South African Journal of Economic and Management Sciences |
| title | The determinants of capital structure of microfinance institutions in Ghana |
| title_full | The determinants of capital structure of microfinance institutions in Ghana |
| title_fullStr | The determinants of capital structure of microfinance institutions in Ghana |
| title_full_unstemmed | The determinants of capital structure of microfinance institutions in Ghana |
| title_short | The determinants of capital structure of microfinance institutions in Ghana |
| title_sort | determinants of capital structure of microfinance institutions in ghana |
| url | https://sajems.org/index.php/sajems/article/view/587 |
| work_keys_str_mv | AT anthonykyereboahcoleman thedeterminantsofcapitalstructureofmicrofinanceinstitutionsinghana AT anthonykyereboahcoleman determinantsofcapitalstructureofmicrofinanceinstitutionsinghana |