Title: WHOSE PERCEPTION IS IT? RESPONDENT-LEVEL AND INSTITUTIONAL-LEVEL EVIDENCE ON INTERNAL CONTROL QUALITY IN MICROFINANCE INSTITUTIONS

Authors: Amah Denis Agem and Dr. Chi Collins Penn

Abstract: Survey research on internal control asks individuals to describe a property of the organisation they work in and treats the answers as measurements of that organisation. This paper asks how much of such an answer reflects the organisation, and whether the two vantage points within an organisation describe the same thing. We surveyed 320 key informants in 80 Category 1 microfinance institutions in Cameroon, two from management and two from operational positions in each, with an institution code on every questionnaire. Between 4 and 13 percent of the variance in perceived control quality lies between institutions. The reliability of a four-informant institution mean is 0.39, and a single informant correlates at 0.59 with that mean. Management and operational respondents rate control equally favourably, and the association between internal control and information quality is almost identical in the two groups, yet their institution means correlate at only 0.34. Level and ordering come apart: a study surveying one position type would reach the same conclusion about the sector but a different one about which institutions are well controlled. We interpret these findings through composition model theory and argue that intraclass correlations should be reported as standard.

Keywords: Some Key Informants; Multi-Level Measurement Problems; On Composition Models; The ICC Revisited; Internal Controls and MFIs.

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