THE ROLE OF MICROFINANCE INSTITUTIONS IN THE MOBILIZATION OF FUND FOR MICRO CREDIT SCHEME IN NIGERIA

Well Researched and Ready to use Masters Dissertation, page number: 75, Department: MBA Accountancy

ABSTRACT

In the course of carrying out this research, data were collected from both primary and secondary sources to test the hypotheses. The Random sampling

technique was used to determine the sample size. In analyzing and presenting

data collected, tables and percentages were used. The Chi-square method was

used to test the hypotheses stated, and after a careful test on the data, it was

revealed that microfinance institutions play significant roles in the mobilization

for fund for micro credit scheme in Nigeria, that implementation of microfinance policy in Nigeria is low and also that the attitude of commercial banks as regards micro credit scheme in Nigeria is unfavorable. It is therefore, recommended that government should enforce and monitor the implementation of microfinance policies and also provide incentives for commercial banks that involve in micro credit scheme so as to create a favorable or enabling environment for the parties involved.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Credit has been recognized as an essential tool for promoting small and medium enterprises (SMEs) in Nigeria. About 70 percent of the Nigerian population is engaged in the informal sector or in subsistence agricultural productions.

Governments at all levels have seen the fact that for sustainable growth and development to be achieved, the financial empowerment of the rural area is salient. This is being the repository of the predominantly the poor in the society. Again, credits to microenterprises are assuming importance in rural areas in response to the need of the less privileged entrepreneurs with limited or no capital base. Institutions such as commercial banks have not been performing

optionally in this direction. This is evidenced by the less than one percent share of total credit to small and medium enterprises (SMEs) in the recent years. The only reasons adduced for this apathy to cater for the rural grassroots development are that commercial loans to private small and microfinance business were regarded is highly risky and unprofitable due to lack of acceptable collateral. Moreover, the formalities of commercial banks are formidable deterrents to microbusiness operators, many of whom even lack the formal education necessary to cope with them. Community banking was introduced and adopted as part of the Federal Government’s measures to open up credit lines and other financial services to people at the grassroots and, thus, alleviate

poverty. The community banks, however, failed unlike what are obtainable in Ghana, Gambia and some other countries of the world due to their ownership structures and lending rules coupled with the Nigerian’s experience of difficult economic climate of the 1990s This scenario has led to the emergence of microfinance institution in Nigeria. This institution has taken up the task and

responsibilities to provide funding for the poor as well as microenterprises in Nigeria since the big and more capitalized financial institutions are most likely to focus more on financing big businesses.

Order the Complete Dissertation

Don't forget to share with your friends