The Role Of Microfinance Banks in the Alleviation of Poverty In Nigeria

ABSTRACT 

This study explores the immense role of the microfinance banks in the alleviation of poverty in Nigeria. The researcher revealed that the rate at which rural dwellers deposit their money in their pillows rather than in microfinance banks is high. Data were collected through primary and secondary sources. As regarded to primary sources, questionnaires and interviewed were used. The chi-square (x²) method was used for testing of hypotheses. Responses to the questionnaires were analyzed using percentage method of analysis. Based on the findings of this study, an attempt on the role of microfinancing as stimulus to poverty alleviation in Nigeria may lack adequate knowledge of various financial transactions available and how the rural dwellers can access them. In conclusion, it hoped that the recommendation will help the microfinance banks to strengthen its weakness for better and effective services in order to achieve its sets of goals and socio-economic advancement for the alleviation of poverty in Nigeria. 

 CHAPTER ONE 

INTRODUCTION 

1.1: BACKGROND OF THE STUDY 

   A robust economic growth cannot be achieved without putting in place well focused programme to reduce poverty through empowering the people by increasing their access to factors of production. The latent capacity of the poor for entrepreneurship would be significantly enhanced through the provision of microfinance services to enable them engage in economic activities and be more self-reliant, increase employment opportunities, enhance household income and create wealth. Micro-financing has existed for years before the introduction of conventional banking in Nigeria and the later part of nineteenth century. (Ekot, 2008). The traditional Nigerian society has a system of group savings and assistance to one another. The practice was that a group of people who had needs for some form of capital or lump sum to execute a particular project which they could not raise adequate savings on their own, usually come together to form a savings group. The group may be named after the leader who is usually the initiator of the venture. The traditional microfinance institutions provide access to credit for the rural and urban low-income earners. These are mainly the informal self-help groups such as Isusu,women association like one obtainable during popular August meetings, Umu-ada progressive women association. Other providers of microfinance services include savings collectors and co-operatives. (CBN brief, 2005)