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Source publication
Purpose
This paper aims to evaluate the relation between governance and financial efficiency of credit unions in Brazil. The study shows how poor financial efficiency in credit unions may result from undesirable configurations in executive management and other variables related to governance.
Design/methodology/approach
The study develops an innov...
Contexts in source publication
Context 1
... results presented in Figure 2 provide an initial view of the relationship between the governance groups and cooperative performance. The financial indicator used in this analysis is the leverage ratio: the ratio between the net loans (excluding provision for loan loss) and the institution's equity [8]. ...
Context 2
... results presented in Figure 2 provide an initial view of the relationship between the governance groups and cooperative performance. The financial indicator used in this analysis is the leverage ratio: the ratio between the net loans (excluding provision for loan loss) and the institution's equity [8]. ...
Citations
... Members with financial expertise may be able to keep a closer eye on management and respond appropriately to their verdicts. Previous studies by Favalli et al. (2020) and Mori (2014) argued that board members with skills have a substantial impact on monitoring which eventually improves compliance levels. As the monitoring role is enhanced, the high IFRSs compliance level is expected. ...
This study examined the influence of corporate governance characteristics: size, women on board, financial skills of members, frequency of meetings and financial skills of the supervisory committee on compliance with International Financial Reporting Standards (IFRSs). The study was premised on Savings and Credit Co-operatives (SACCOs) complying with IFRSs disclosures. Yet, evidence on the relationship between corporate governance and IFRSs compliance in Tanzania is limited. Therefore, this paper contributes to the body of knowledge by extending the application of agency theory to determine the relationship among variables. Specifically, the study used a quantitative panel data set of 202 SACCOs from the 2013–2020 period collected from annual financial reports and subjected to descriptive analysis and regression models. Descriptive statistics indicate that SACCOs in Tanzania are complying with 44% of IFRSs disclosures. Results show a positive significant relationship between the board members possessing financial skills, the inclusion of women on the board, supervisory committee financial expertise and IFRS compliance level. Moreover, the study found no evidence that board size and board meetings influence IFRSs compliance levels. To improve IFRS compliance level, SACCOs in Tanzania are called to elect board members with financial skills; besides, financially skilled women should be encouraged to be part of SACCOs boards.
... É indispensável que as cooperativas de crédito, como outras empresas, possam medir seu desempenho, comparar-se com seus concorrentes e identificar as melhores práticas ou oportunidades de negócios para conseguir obter ou manter algumas vantagens competitivas (Dia, Takouda, & Golmohammadi, 2020). Uma dificuldade inerente a essas avaliações é a utilização de indicadores adequados para medir o desempenho financeiro das cooperativas, uma vez que a obtenção de lucros não é objetivo dessas instituições (Favalli, Gori Maia, & Silveira, 2020). ...
O conselho de administração é crucial para o desenvolvimento organizacional
das cooperativas de crédito, mas as características dessas cooperativas
desafiam os mecanismos tradicionais de governança. A pesquisa propõe
analisar como as características do conselho de administração, decisões de
investimento e práticas de governança corporativa afetam o desenvolvimento
organizacional das cooperativas de crédito no Brasil e nos Estados Unidos. O
método usado será a regressão com dados em painel para o período de 2010
a 2022. Espera-se que os resultados contribuam para o cooperativismo
brasileiro identificando as características dos conselhos de administração com
maior potencial de contribuir para o desenvolvimento organizacional das
cooperativas.
... Kinerja koperasi dapat dijadikan indikator untuk mengetahui apakah suatu koperasi mampu mencapai tujuannya secara efektif dan efisiensi. Studi tentang kinerja koperasi termasuk di Brasil menyoroti rendahnya efisiensi dan pentingnya volume sumber daya pada kinerja keuangan mereka (Favalli et al., 2020). Kinerja yang negatif dapat dievaluasi menurut variabel yang terkait dengan rasio leverage dengan mengamati aktivitas keuangan mendasar, yaitu aktivitas pinjaman (Aurélio Marques Ferreira et al., 2007). ...
The purpose of this study is to examine the effect of marketing strategy, leadership and interest rate risk on the financial performance of Credit Union. The sample of this study is 44 Credit Union members of the Credit Union Central of Jakarta. The author conducted a questionnaire survey to collect data and test the hypotheses developed in this study. the author sent the questionnaires to the boards and managers of Credit Union. Regression analysis of multiple linear was applied to analyze the data. The results show that leadership has a positive and significant effect on the financial performance of Credit Union. Marketing strategy and interest rate risk have no effect on the financial performance of Credit Union.The results of this study can be used as consideration for the Credit Union to improve skills leadership of the boards and managers.The study has three limitation. First the authors collect data from Credit Union to minimize the effect of data heterogeneity. To improve the generalizability of the study, future study might consider using data from other types of cooperatives. Second, this study uses primary data so it has risks respondent subjectivity, future study might use different ways of measuring interest rate risk using more objective empirical proxies such as income gap
... Apart from compensation, board configuration, and programs, specific management and leadership strategies have been investigated by prior literature. For example, Favalli et al. (2020) examined the impacts of CG (e.g., leadership strategy and management and supervision) on Brazilian credit unions. They found that cooperatives in groups with the highest levels of strategic leadership, representation and participation, and management and supervision performed the best, indicating a higher concentration of leverage ratio values. ...
Despite the proliferation of systematic literature review studies on cooperative organization, a similar review of cooperative governance and performance literature has yet to be conducted. To close this gap, this paper presents a systematic literature review on the relationship between cooperative governance (CG) and cooperative performance using the PRISMA approach. Major search engines were used in the compilation of studies published between 2009 and 2021. A review of the 30 selected papers indicate there are four categories of CG used in relation to cooperative performance: board characteristics, policy compliance, management, leadership and strategies, and the board’s social or human capital. The results also suggest mixed and inconclusive findings on the CG–cooperative performance relationship. The current study seeks to contribute to the existing literature by highlighting patterns and gaps of past studies on the CG–cooperative performance relationship, thereby providing insights for future research.
... Since SACCOSs in Tanzania vary in size and age and need control for deviations, this study used SACCOS's size and age as control variables, similar to most of the previous SACCOS and other MFI studies reviewed (see, e.g., Almehdawe et al., 2020;Favalli et al., 2020;Iqbal et al., 2019). As SACCOSs age, they obtain more experience in their operations in the respective business fields, thus increasing the likelihood of providing sustainable services due to enhanced financial performance (Almehdawe et al., 2020). ...
This paper examines the impact of board characteristics—such as size, gender diversity, skills, and meeting frequency—on the financial performance of SACCOSs in Tanzania. The study focused on three financial performance indicators: net loan income, operating efficiency ratio, and deposit-to-asset ratio. Descriptive statistics and linear regression models were used to analyse panel data collected from financial reports of 198 SACCOSs for five years (2014–2018). The results show a positive and significant relationship between financially-skilled board member(s) and the depositto-asset ratio; conversely, they were negatively associated with the operating efficiency ratio. The results further show that board meetings are positively and significantly related to net loan income, whereas board size is positively associated with the operating efficiency ratio. Moreover, the paper found no evidence of a relationship between women’s board members and financial performance. Impliedly, having financially-skilled directors on a board and regular board meetings facilitated financial performance in a SACCOS. Thus, the paper calls for board members to have financial skills, and boards to conduct regular meetings for constructive advice and effective monitoring to boost financial performance. JEL Classification: G2, G20, G3, G30, G39, M49
... For instance, the influence of cognitive conflicts on the board's role performance have been often nonsignificant (Jansen, 2021), negative (Minichilli et al., 2012) or even positive (Heemskerk et al., 2015). Consequently, the results cannot be generalised to SACCOS, given their cooperative nature as a members-based non-profit financial institution that abides by cooperative principles (Favalli et al., 2020;Zivkovic, 2015). Notably, SACCOS are governed by members through elected boards and use a democratic control system of one-member-one-vote in decision-making (Bijman et al., 2013(Bijman et al., , 2014McKillop & Wilson, 2015). ...
This paper examines the effect of board processes on efforts norms, cognitive conflict, and use of skills and knowledge on the board’s performance in monitoring, resource provision and strategic roles in SACCOS in Tanzania. The social exchange theory provided theoretical guidance. A cross-sectional design with a mixed-methods approach was used. Data were collected using a questionnaire administered to 198 board chairpersons and an interview with nine key informants from SACCOS managers and cooperative officers. Data were analysed through multiple linear regression and thematic analysis. The results revealed a strong and significant relationship between effort norms and board roles' performance in monitoring, resource provision, and strategic roles. The results further indicated a positive and significant relationship between the application of skills and the knowledge of board members, coupled with their ability to monitor and provide the board with essential resources. The results further revealed that cognitive conflict negatively influenced board members' ability to play strategic roles. Moreover, no significant relationship was found out between cognitive conflict and board roles in monitoring or resource provision. Effort norms and the Use of board members' skills and knowledge significantly predicted board role performance. Therefore, the study recommends that the board chairperson encourage a participatory culture to ensure that board members exert enough effort into and apply their skills and knowledge in fulfilling their roles. Furthermore[1], SACCOS members should elect board members based on their skills, knowledge, and ability to work and collaborate constructively and respectfully with other members
... In addition, Favalli, Maia, and Silveira (2020) also evaluated the relation between governance and financial efficiency of credit unions in Brazil. The study revealed that better governance substantially increases the efficiency of credit unions in terms of a higher level of credit operations per institution. ...
Cooperatives are organizations that are formed jointly by members to meet their economic needs and interests. The role of cooperatives is to increase the socioeconomic status of the members as well as eliminate poverty problems. Nevertheless, the performance of cooperatives in Malaysia in terms of turnover is still low compared to the other countries. This will be a cause for concern because inadequacies of financial decisions lead to the failure of cooperatives. Hence, this study aims to evaluate the financial performance and efficiency of cooperatives in Malaysia. This study applies Ratio Analysis to evaluate the financial performance of the cooperatives. Data Envelopment Analysis (DEA) was also employed in this study to determine the efficiency scores of cooperatives over the period 2010 to 2017. DEA results obtained that inefficiency of managerial performance leads to the inefficiency of the overall technical efficiency. The study recommends that the management of cooperatives in Malaysia should enhance their managerial performance because pure technical efficiency was found to contribute less to overall technical efficiency.
... Savings and Credit Co-operative Societies (SACCOS) are member-based and democraticallycontrolled microfinance institutions (MFIs). They are operated by extending financial services such as savings and credit at fair interest rates for members to maintain a common bond (Almehdawe, Khan, Lamsal & Poirier, 2020;Favalli, Gori Maia & da Silveira, 2020). The common bond membership is drawn from certain socio-cultural affiliations based on neighbourhood, ethnicity, tribes, religious and organizations (Goddard, McKillop, & Wilson, 2008). ...
This paper reports the findings of a study that had evaluated the influence of board attributes size, gender diversity, skills and meetings on board’s role performance in terms of strategic, resource provision and monitoring roles in SACCOS, Tanzania. Data on the boards’ roles were collected using a questionnaire survey administered to 198 SACCOS boards’ chairpersons. Data for board’s attributes were obtained from annual audited financial reports. Data were then subjected to factor analysis and linear regression models. The results show that board meetings have a positive and significant influence on the boards’ ability to perform strategic, resource provision and monitoring roles. The study further shows that board financial skills have positive and significant effect on strategic and monitoring roles. Impliedly, having a financial skill director on board parallel with board meetings help to stimulate active participation of board members in executing their roles. No evidence, however, was found on the effect of board size and board gender diversity on the board roles’ performance. Thus, the study suggests that financial skills of members needs high prioritization in the election of board members to boost efficiency in performing their board roles. Also, regular board meetings for worthy strategies settings, advice and effective monitoring of the SACCOS.
... A cooperativa de crédito é uma instituição financeira formada por uma associação autônoma de pessoas unidas voluntariamente, com forma e natureza jurídica próprias, de natureza civil, sem fins lucrativos, constituída para prestar serviços a seus associados (Banco Central do Brasil [Bacen], 2018). Além disso, visa à apresentação de soluções financeiras e à geração de renda para seus cooperados, e pode também ser entendida como mecanismos promotores da intermediação financeira entre seus associados e o mercado (Da Silva et al., 2017;Favalli et al., 2020). ...
... Desse modo, os recursos captados pelas cooperativas de crédito são aplicados no seu local de origem, de forma a aumentar a produção e atender aos fins sociais decididos pelos cooperados, nas assembleias (Portal Cooperativismo Financeiro [PCF], 2018). Fica evidente que a sobrevivência das cooperativas de crédito está atrelada à rentabilidade, à prestação dos serviços e à operação de captação e concessão de créditos aos cooperados (Paiva & Santos, 2017;Favalli et al., 2020). ...
Este estudo analisa como as dimensões da orientação empreendedora (oe) relacionam-se com o desempenho nas cooperativas de crédito. Para tanto, abordam-se seis dimensões: inovatividade, assunção riscos, proatividade, autonomia, agressividade competitiva e rede de relações. Foi realizada um survey, com uma amostra de 67 cooperativas. Para a análise de dados, utilizou-se modelagem de equações estruturais, no software SmartPLS 3.0. Os achados evidenciam que, na oe, as dimensões “assunção de risco” e “agressividade competitiva” mantêm associação positiva e significativa com o desempenho. Apesar das especificidades das cooperativas de crédito, observa-se a pertinência de algumas das dimensões desse construto na gestão de tais instituições. O estudo contribui para a literatura ao explorar a multidimensionalidade do construto da oe, ao acrescentar uma dimensão com escassa discussão (rede de relações) e ao considerar um contexto singular (cooperativas de crédito).
... Charmondusit et al. [4] constructed three sustainable development indicators which are economic indicators, environmental indicators, and social indicators and measured the financial efficiency of the wooden toy industry. Ricardo et al. [5] used a multi-indicator system that included representativeness, participation, and leadership to evaluate the relationship between governance and financial efficiency of Brazilian credit cooperatives. Le et al. [6] used the sample data of 31 Asian countries from 2004 to 2016 to construct a comprehensive index system of three financial dimensions using principal component analysis (PCA) based on standardized variables and conducted research on the financial efficiency of the samples. ...
This paper introduces a superefficiency financial efficiency model with undesirable output based on the features that the output of industrial enterprises contains desirable output as well as undesirable output. Furthermore, the Malmquist index model is constructed for financial efficiency dynamic study, and the spatial Durbin model is constructed for evaluation and impact of enterprises. According to the financial data of Chinese enterprises from 2007 to 2019, this paper evaluates the financial efficiency of Chinese interprovincial industrial enterprises dynamically and measures the influence levels of major impacts on the financial efficiency of Chinese interprovincial industrial enterprises quantitatively. As reported by this paper, the conclusions are as follows: (1) In reference to the financial efficiency dynamic study analysis, there is an obvious growth trend in the financial efficiency of Chinese interprovincial industrial enterprises in different years. Based on the horizontal analysis of financial efficiency, there is a relatively large gap in financial efficiency among Chinese interprovincial industrial enterprises. (2) From the separation factors of financial efficiency analysis, the main factor affecting the growth of the financial efficiency of Chinese industrial enterprises is the modification of technology, and the modification of technical efficiency has a minor impact. (3) In accordance with the impacts of enterprise efficiency analysis, several major factors influence the financial efficiency of Chinese industrial enterprises such as major business cost, operating profit, total liabilities, national capital, and the number of R&D personnel.
