Organization of the accounting function as a lever for the financial performance of microfinance in Benin

Abstract

The purpose of this research is to analyze the role of the organization of the accounting function on the financial performance of microfinance in Benin. To achieve this objective, data was collected from 72 managers (managers, accountants, cashiers and collection agents) of microfinance institutions. Analysis of the results from the surveys reveals that financial performance and non-compliance with accounting procedures are strongly related R = 0.697 (Cohen, 1986) and that this relationship is positive (β = -.672 < 0 and B=, -.636 < 0) then the financial performance and the delay in recording accounting documents are also strongly related R = 0.761 (Cohen, 1986) and this relationship is positive (β= -.616 < 0) . So these results confirm that the non-compliance with accounting procedures and the delay in recording accounting documents negatively influences the financial performance of microfinance institutions. Thus the level of financial performance of microfinance institutions is explained by the quality of the organization of their accounting function or even their improvement in compliance with accounting procedures and the recording of accounting documents.

Keywords: Organization, Accounting function, Financial performance, Microfinance institution

JEL Classification: L25, M41

Paper type: Empirical research