Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
The Impact of Hr Governance on the Success of the Microfinance
Sector in South Africa
MJ Ndlovu
Background: Entrepreneurship is regarded widely as the key to unlocking economic growth and
sustainability. The South African government is championing and has prioritized cooperatives and
small, medium and micro enterprises as vital tools for socio-economic development. This has created
a rise in the number of emerging entrepreneurs traditionally excluded from the formal financial sector,
who are now seeking appropriate financial services. The microfinance sector provides these
services, but the sector has been fraught with poor sustainability and viability.
Purpose: The study aimed to examine and assess the microfinance sector– its impact, structure,
efficiencies and deficiencies. Further, it intended to explore, describe and distinguish HR Governance
and its key elements relative to entrepreneurial success within the sector and to investigate the extent
to which micro financers have adopted governance, in line with the HR Governance framework.
Lastly, the study proposed a multidimensional sector-relevant HR Governance Framework.
Methods: The study was based on a descriptive research design, was multi-disciplinary in nature
and employed a combination of qualitative and quantitative research methods. The quantitative part
of the study entailed a systematic review and synthesising of the literature published over the last 15
years, as well as administering surveys to 15 microfinance institutions registered with MFSA. A
qualitative study in the form of in-depth interviews with the three significant microfinance institutions,
supplemented the study.
Results: The findings indicate that HR Governance is a comprehensive and multidimensional
construct, contributing positively to the success of the sector, enhancing the value of the
organisations within the sector. The study also confirmed the widely-held views that good
governance is about achieving organisational goals and starts at the top.
Conclusion: The study has expanded the existing theory on HR Governance and highlights the
critical role that HR governance plays in organisations.
Key words: Corporate Governance, HR Governance, Microfinance, Entrepreneurial
Success, Risk and Sustainability.
Track: Finance
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Graduate School of Business and Leadership, University of KwaZulu Natal, Email: ndlovum2@ukzn.ac.za|
fqbsolutions@gmail.com, Tel: 072 997 4276 | 031 260 7680