The moderating role of board gender diversity on the funding sources and microfinance institutions’ efficiency nexus: a global analysis

Abstract

This study explores how different funding sources influence the financial efficiency of microfinance institutions (MFIs) and examines whether board gender diversity (BGD) moderates these relationships. Using a panel dataset of 661 MFIs across 86 countries, efficiency scores are calculated through Data Envelopment Analysis, followed by regression analysis to test direct and interaction effects. The findings show that retained earnings and commercial borrowings significantly improve MFIs efficiency, while donations have a weaker association. The interaction analysis reveals that BGD positively strengthens the link between commercial borrowings and efficiency, although not all moderating effects are statistically significant. This study contributes to the literature by integrating governance perspectives with funding strategies, offering new insights into how gender-diverse boards can strengthen the link between external funding and efficiency. The findings provide practical implications for donors, investors, and policymakers aiming to improve MFIs performance through inclusive governance.