Microfinance credit strategy and Economic Development - Accountants Perspective

Abstract: Economic development is an important issue in the 21st Century. The attention has therefore being focused on microfinance institutions and their contributions towards economic development. The main objective of this paper is to sample the opinion of professional accountants on the contribution of Microfinance Institutions credit towards economic development in Nigeria. The study proposes some credit strategies to be adopted by MFIs for them to be able to contribute meaning to the development of the economy. The population of the study comprises of accountants in Ogun State Nigeria, upon which they were stratified in to three (3) strata (sector), viz, Accountants in the Public, Private and Industry sector. One hundred and eighty-four (184) of the population constituted the sample size selected through convenient sampling across each stratum. A combination of descriptive statistics and multiple regression analysis were used to analyze the data collected. The study revealed that credit subsidy by relevant arms of government (0.604) was found to be significant at 1% with a coefficient value of (3.455). This implies that credit subsidy as an adopted credit strategy influence the level of output of economically active individuals and SMEs. Thus, the more MFIs adopt the use of credit subsidy as a credit strategy the likelihood the effect of economy is being suppressed. Other significant parameters are Sourcing for external funds (0.127) significant at 1%, training on proper utilization of credit facility (.035) significant at 10%. The implication of these is that as beneficiaries are trained on the utilization of credit, the less likelihood would the effect of GDP growth be observed. In all, credit subsidies, sourcing for external funds by MFI and training on proper utilization of credit beneficiaries was all found to influence the output of MFI activities as a credit strategy for economic development. The study therefore, recommends that, accountants and Managing Directors of various MFIs should adopt the credit strategies propounded in the study for them to be able to contribute meaningfully towards government efforts and economic development at large.