Corporate governance in microfinance institutions: A systematic review of theoretical perspectives, methodological approaches, and empirical evidence

Corporate governance in microfinance institutions (MFIs) significantly influences their ability to pursue financial sustainability and social outreach, yet two decades of empirical research have produced fragmented and contradictory findings. This paper presents a systematic review of 47 peer-reviewed studies published between 2005 and 2025 that examine how governance mechanisms shape MFI dual performance. Rather than treating theoretical concentration and empirical inconsistency as symptoms of weak scholarship, we demonstrate that both reflect structural constraints embedded in prevailing data infrastructures. Widely used datasets, most prominently MIX Market, disproportionately support agency-theoretic constructs while rendering relational, institutional, and stakeholder governance dimensions largely unobservable, systematically shaping theory selection, empirical strategy, and reported findings across the literature. Building on these considerations, the review makes three contributions. First, it provides a structural explanation for why agency theory dominates the field and argues that theoretical diversification requires investment in richer data rather than simply broader lens selection. Second, it demonstrates that standard governance variables function as bundled proxies whose effects are contingent on organizational form, regulatory status, and stakeholder structure, and proposes simultaneous equations modeling to capture the feedback loops between financial performance and social outreach that single-equation designs cannot estimate. Third, it identifies informal and relational governance mechanisms, trust-based networks, board members’ social capital, and stakeholder embeddedness as theoretically central but empirically absent, and proposes longitudinal and mixed-method designs to address this blind spot. Together, these contributions reframe the research agenda on MFI governance and call for a redefinition of effective governance in hybrid, mission-driven organizations.