Does Microfinance Improve the Standard of the Poor?

Taiwo, J.N. and Ojo, Joshua A. T. (2016) Does Microfinance Improve the Standard of the Poor? European Journal of Accounting, Auditing and Finance Research, 4 (5). pp. 1-21. ISSN 2054-6327

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Abstract

Access to microfinance is expected to improve the standard of living of the poor that are economic active and microfinance clients by enabling them to increase their household income. This study examined the contributions of Microfinance institutions to poverty reduction in Southwest Nigeria, using both primary and secondary data collected from Microfinance institutions (MFIs) and randomly selected customers (micro, small and medium enterprises) of the same Institutions. The study adopted a multistage sampling technique. The data from the survey was used to analyze the impact of loan received on earnings using a loan-impact probability model. The study found that Microfinance is an effective poverty alleviation strategy as it reaches the target customers more effectively and helps to a large extent in improving their standard of living and social status and also impacts greatly on Customers’ savings habit and income generation. The study therefore recommended that MFIs should embark on funds mobilisation drive to be able to reach out to more viable customers for provision of financial services. It also recommended that there should be provision of incentives by government to sustain MFIs in order to further extend their services to the rural areas and capacity building of MFIs in Nigeria should be made mandatory so as to develop appropriate policies that will enhance sustainability and stability.

Item Type:	Article
Uncontrolled Keywords:	Microfinance, Poverty, Microfinance Institutions (MFIs), Incentives, MSMEs
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce 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:	09 Aug 2016 09:18
Last Modified:	09 Aug 2016 09:18
URI:	http://eprints.covenantuniversity.edu.ng/id/eprint/6772

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