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Demand and utilization of Micro loan among Micro Entrepreneurs in Nigeria

Taiwo, J.N. and OLURINOLA, Isaiah Oluranti (2016) Demand and utilization of Micro loan among Micro Entrepreneurs in Nigeria. International Journal of Economics, Commerce and Management United Kingdom., IV (6). pp. 275-299. ISSN 2348 0386

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Micro loan could be used by micro enterprises for productive purposes such as investments, seeds or additional working capital. The study presents empirical findings on the impact of Microfinance (MF) on the welfare and poverty alleviation in Southwest Nigeria. In an attempt to answer the research question for this study, data from field survey conducted among the microfinance banks and their customers in Lagos and Ogun States, was used to analyze the impact of loan received on earnings using the Ordinary Least Squares (OLS) econometric technique. Also, a linear Probability model was specified and estimated to measure the log of odds of obtaining loans from the microfinance banks by the customers. In addition, an analysis of determinants of earnings was done using the Mincer (1973) model. The study found that loan demand is interest rate insensitive but sensitive to availability. It was also established that microfinance programmes have impacted the businesses and lives of the beneficiaries in several positive ways, particularly in their economic circumstances and access to essential life-enhancing facilities and services. The study therefore recommended that MFIs’ clients should improve on their level of education, the MFIs should seek long term capital from the Pensions and Insurance Companies so that they can grant larger volume of loan and to greater number of people and the government should tackle the problems of infrastructural development and maintenance.

Item Type: Article
Uncontrolled Keywords: Microfinance; Entrepreneurs; Poverty, Financial Services, Nigeria
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Aderonke Olufunke Asaolu
Date Deposited: 08 Aug 2016 11:24
Last Modified: 08 Aug 2016 11:24

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