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VOL. 8, ISSUE 1 (2026)
The impact of financial risk management practices on financial performance of microfinance institutions in Indian division
Authors
Dadem Kemgou Edouard Guilaire, SAA Lapa Adelphe Achile, Ongono Amogo Tobie Nicaise, Miranda Ayoy Iyassa
Abstract
The financial performance measures used were Return on Asset (ROA) and
Return on Equity (ROE). The RMPs in question included risk identification, risk
appraisal, risk control, risk monitoring and often practiced risk management. A
five likert scale questionnaire with closedended questions were administered to
seven selected MFIs. The results showed that risk identification have a
positive and significant effect on the financial performance of MFIs in Ndian
Division while risk control and risk monitoring are found to have a negative
and an insignificant effect on the financial performance of MFIs in Ndian
Division. The overall result revealed that financial risk management practices
have a significant effect on the financial performance of MFIs in Ndian
Division at 1% level of significant. Therefore, we conclude that risk
management practices have a significant effect on the financial performance of
MFIs in Ndian Division. We recommend that MFI in Ndian Division should
implement comprehensive risk management policies and procedures to mitigate
identified risks like credit risk and liquidity risk management.
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Pages:82-90
How to cite this article:
Dadem Kemgou Edouard Guilaire, SAA Lapa Adelphe Achile, Ongono Amogo Tobie Nicaise, Miranda Ayoy Iyassa "The impact of financial risk management practices on financial performance of microfinance institutions in Indian division ". International Journal of Management and Economics, Vol 8, Issue 1, 2026, Pages 82-90
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