Thesis Abstract

Abstract
Microfinance banks have gained significant attention worldwide for their potential to alleviate poverty, empower individuals, and contribute to economic growth and development. In the Nigerian context, the impact of microfinance banks on the economy has been a subject of interest due to the country's development challenges and the role microfinance can play in addressing them. This research aims to investigate the impact of microfinance banks on the economic growth and development of Nigeria. The study utilizes a mixed-methods approach, combining quantitative analysis of financial data from selected microfinance banks in Nigeria with qualitative interviews and surveys with stakeholders in the microfinance sector. By analyzing financial indicators such as loan portfolio size, outreach, profitability, and sustainability of microfinance banks, the research seeks to assess their contribution to economic growth in Nigeria. Furthermore, the study explores the role of microfinance banks in promoting financial inclusion and empowering marginalized populations, such as women and rural communities. By examining the extent to which microfinance services reach these target groups and the impact of such services on their socio-economic status, the research aims to shed light on the broader development impact of microfinance in Nigeria. In addition, the research investigates the challenges facing microfinance banks in Nigeria, including regulatory constraints, funding limitations, and governance issues. By identifying these challenges and their implications for the sustainability and effectiveness of microfinance institutions, the study aims to provide recommendations for policymakers, regulators, and practitioners to enhance the impact of microfinance on economic growth and development in Nigeria. Overall, this research contributes to the existing literature on microfinance and economic development by providing empirical evidence on the impact of microfinance banks in Nigeria. The findings of the study are expected to inform policy decisions aimed at promoting financial inclusion, poverty reduction, and sustainable economic development in Nigeria. By understanding the opportunities and challenges facing the microfinance sector, stakeholders can work towards maximizing the potential of microfinance in contributing to the overall socio-economic development of the country.

Thesis Overview

1.1 BACKGROUND TO THE STUDY

It would be observed that, despite the presumed developments in the Nigerian economy, the country is still largely being regarded as a developing country (Onyema, 2006). More so, its industrial growth is not quite impressive. Before the emergence of formal microfinance institutions, informal microfinance activities flourished all over the country. Traditionally, microfinance in Nigeria entails traditional informal practices such as local money lending, rotating credit and savings practices, credit from friends and relatives, government owned institutional arrangements, poverty reduction programmes etc (Lemo, 2006). The Central Bank of Nigeria Survey in 2001 indicated that the operations of former microfinance institutions in Nigeria are relatively new, as most of them never registered after 1981. Before now, commercial banks traditionally lend to medium and large enterprises which are judged to be credit-worthy. They avoided doing business with the poor and their micro enterprises because the associated cost and risks are considered to be relatively high (Anyanwu, 2004).

The Federal and State governments have recognized that for sustainable growth and development, the financial empowerment of the rural areas is vital, being the repository of the predominantly poor in society and in particular the SMEs. If this growth strategy is adopted and the latent entrepreneurial capabilities of this large segment of the people is sufficiently stimulated and sustained, then positive multipliers will be felt throughout the economy. To give effect to these aspirations various policies have been instituted over time by the Federal Government to improve rural enterprise production capabilities. (Olaitan 2006) In view of this, the impact of micro finance bank in economic growth and development of Nigeria started showcasing itself. With the initiative of microfinance, rural areas are opportune to grow and develop as loan and fund are easily given to rural farmers and entrepreneur. Jobs opportunities were created since there is avenue for lending and investing.