Abstract: The financial management of microfinance banks (MFBs) in Kenya remains one of the critical issues in the
sector, thus, making financial management practices essential in shaping the financial23 performance23of the
MFBs. In the recent past, the microfinance banks have continued to register an unstable financial23
performance, evidenced in their annual audited reports and other statistics even when they have been practicing
several financial management practices. Hence, the study sought to determine the effect of board
characteristics, financing mix, credit default management, and assets and liabilities management practices on
financial performance of microfinance banks in Kenya. The study tested hypotheses on a 0.05 significance level.
The theories and models adopted were: agency theory, pecking order theory, credit default model, shift-ability
theory, and financial outcome......
Key Words: Asset and Liability Management, Board Characteristics, Credit Default Risk, Financial
Management, Financial Management Practices, Financial Performance, Financing Mix
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International Journal of Managerial Finance 12 (3) 335350..