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Effects of Microfinance on Micro and Small Enterprises (MSEs) Growth in Nigeria

Babajide, A. A (2012) Effects of Microfinance on Micro and Small Enterprises (MSEs) Growth in Nigeria. Asian Economic and Financial Review, 2 (3). pp. 463-477.

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This paper investigates the effects of microfinance on micro and small business growth in Nigeria. The objectives are: one, to examine the effects of different loan administration practices (in terms of loan size and tenor) on small business growth criteria. Second, to examine the ability of Microfinance-Banks (MFBs) (given its loan-size and rates of interest charged) towards transforming micro-businesses to formal small scale enterprises. The paper employed panel data and multiple regression analysis to analyze a survey of 502 randomly selected enterprises finance by microfinance banks in Nigeria. We find strong evidence that access to microfinance does not enhance growth of micro and small enterprises in Nigeria. However, other firm level characteristics such as business size and business location, are found to have positive effect on enterprise growth. The paper recommends a recapitalization of the Microfinance banks to enhance their capacity to support small business growth and expansion.

Item Type: Article
Uncontrolled Keywords: Small Firms, Micro firms, Entrepreneurship, Microfinance, Regression Analysis, Nigeria
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Patricia Nwokealisi
Date Deposited: 25 Apr 2014 09:30
Last Modified: 25 Apr 2014 09:30

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