Project Abstract

Project Overview

<p> <b></b></p><p><b><b>1.0 INTRODUCTION</b></b></p><p><b><b></b></b></p><b><b><p><b>1.1 BACKGROUND OF THE STUDY</b></p><p><b></b></p><b><p>It<br>would be observed that, despite the presumed developments in the Nigerian<br>economy, the country is still largely being regarded as a developing country<br>(Onyema, 2006). More so, its industrial growth is not quite impressive.</p><p>Before<br>the emergence of formal microfinance institutions, informal microfinance<br>activities flourished all over the country. Traditionally, microfinance in<br>Nigeria entails traditional informal practices such as local money lending,<br>rotating credit and savings practices, credit from friends and relatives,<br>government owned institutional arrangements, poverty reduction programmes etc<br>(Lemo, 2006). The Central Bank of Nigeria Survey in 2001 indicated that the<br>operations of former microfinance institutions in Nigeria are relatively new,<br>as most of them never registered after 1981.</p><p>Before<br>now, commercial banks traditionally lend to medium and large enterprises which<br>are judged to be credit-worthy. They avoided doing business with the poor and<br>their micro enterprises because the associated cost and risks are considered to<br>be relatively high (Anyanwu, 2004).</p><p>The<br>Federal and State governments have recognized that for sustainable growth and<br>development, the financial empowerment of the rural areas is vital, being the<br>repository of the predominantly poor in society and in particular the SMEs. If<br>this growth strategy is adopted and the latent entrepreneurial capabilities of<br>this large segment of the people is sufficiently stimulated and sustained, then<br>positive multipliers will be felt throughout the economy. To give effect to<br>these aspirations various policies have been instituted over time by the<br>Federal Government to improve rural enterprise production capabilities.<br>(Olaitan 2006)</p><p>In<br>view of this, the impact of micro finance bank in economic growth and<br>development of Nigeria started showcasing itself. With the initiative of<br>microfinance, rural areas are opportune to grow and develop as loan and fund<br>are easily given to rural farmers and entrepreneur. Jobs opportunities were<br>created since there is avenue for lending and investing.</p><p><b>1.2 &nbsp; AIMS<br>AND OBJECTIVES</b></p><p><b></b></p><b><p>The<br>mains objectives of this research work are to investigate the impact of micro<br>finance bank in economic growth and development of Nigeria.</p><p>Other objectives are as<br>fellows</p><p>i.<br>it will explicate in detail ways in which micro finance banks can contribute in<br>developing rural areas and improving the life of the poor people.</p><p>ii.<br>It will investigate the ways microfinance bank can contribute in building<br>entrepreneurship within the country.</p><p><b>1.3 &nbsp; STATEMENT OF RESEARCH PROBLEMS:</b></p><p><b></b></p><b><p>There<br>are so many problems and challenges that hinders the functionality of the<br>microfinance bank in carrying out their major role of improving economic growth<br>ad development in Nigeria.</p><p>These<br>problems include</p><p>– &nbsp; &nbsp; &nbsp; <br>poor attitude of Nigerians towards MFBs</p><p>– &nbsp; &nbsp; &nbsp; <br>insufficient support from the regulators<br>and government</p><p>– &nbsp; &nbsp; &nbsp; <br>There are communication gaps and<br>inadequate awareness among the masses.</p><p>– &nbsp; &nbsp; &nbsp; <br>Undue competition rather than<br>cooperation from the mega banks, and undue malpractice/Sharp practices by<br>microfinance bank operation.</p><p>The<br>researcher will in the research find possible ways of solving or making better<br>the conditions for the operation of MFBs.</p><p><b>1.4 &nbsp; &nbsp; &nbsp;</b><b>SIGNIFICANCE OF THE STUDY</b></p><p><b></b></p><b><p>This<br>study is essentially significant in that it is directed towards evaluating the<br>impact and role that micro finance banks have on the economic growth and<br>development of Nigeria, especially the rural areas which is a criteria aimed at<br>measuring economic standard.</p><p>Owing<br>to the fact that researcher has aimed at pinpointing the ways in which micro<br>finance bank can help in the revamping of the nation’s economy, the findings of<br>this research work will be of great help to most developing countries who may<br>wish to toe the part of Nigeria in MFB development.</p><p>It<br>will also serve as a reference point for future researchers who in one way or<br>the other will try to unveil the role and impact of micro finance bank to<br>economic development.</p><p><b>1.5 &nbsp; &nbsp; &nbsp;</b><b>SCOPE OF THE STUDY</b></p><p><b></b></p><b><p>The<br>scope of the study is subjected around the frame work of microfinance bank in<br>Nigeria vis-à-vis its contribution to the economic growth and development.</p><p>For<br>accuracy and coherency, the research work will take as a case study of fortis<br>micro finance bank Abuja to enable precision and distinctiveness.</p><p><b>1.6 &nbsp; &nbsp; &nbsp;</b><b>LIMITATION OF THE STUDY</b></p><p><b></b></p><b><p>&nbsp;During the course of this research, a lot of<br>obstacles were encountered.</p><p>Thus,<br>the uncooperation of most people working in the library and other offices where<br>the researcher needed to get materials posed great problem to the researcher.<br>Some of the staffs do not feel safe letting us have access to some materials<br>while others will charge me more than double cost of Photostat before I can get<br>what I wanted.</p><p>Financial<br>constraint is another limitation to this work which is as a result of high cost<br>of transportation fare to the areas of study to gather data, combined with the<br>cost of materials to carry this work to conclusive end.</p><p>It<br>also took great strength to convince the respondents that their responses to<br>the questions in the questionnaire will be treated with great confidentiality<br>and are purely academic.</p><p><b>1.7 &nbsp; &nbsp; &nbsp;</b><b>STATEMENT OF RESEARCH HYPOTHESIS</b></p><p><b></b></p><b><p>It<br>is quite evidential that the major ways in which microfinance bank can help in<br>economic development is through the encouragement of entrepreneurial<br>development.</p><p>The<br>essence of microfinance bank is to enable the <br>poor individual to be able to obtain loan and be able to manage their<br>enterprise.</p><p>To<br>this effect, the following hypothesis will be tested, thus.</p><p><b>Hypothesis I</b></p><p><b></b></p><b><p>H0: &nbsp; Micro finance bank is irrelevant to the<br>economic development and growth of Nigeria since the number of entrepreneurs<br>that uses their services is low</p><p>Hi: &nbsp; Micro finance bank is relevant to the<br>economic development and growth of Nigeria since the number of entrepreneurs<br>that uses their services is low</p><p><b>Hypothesis II</b></p><p><b></b></p><b><p>H0:<br>&nbsp; Microfinance institution do not<br>contribute to entrepreneurial productivity</p><p>H1: &nbsp; Micro finance institutions do contribute to<br>entrepreneurial productivity.</p><p><b>1.8 &nbsp; DEFINITION<br>OF TERMS</b></p><p><b></b></p><b><p><b>IMPACT:</b></p><p><b></b></p><b><p>According<br>to the advanced oxford learner’s dictionary, impact is the</p><p>Powerful<br>effect that something has one somebody or something</p><p><b>MICROFINANCE BANK</b></p><p><b></b></p><b><p>According<br>to the Nigerian Banking Act, 1969 (as amended Bank amendment act 1979),<br>Microfinance banks are institutions constructed as a company licensed to carry<br>on the business of providing microfinance services such as collection of<br>savings, loans provision, insurance money transfer services and other non<br>financial services that are needed by the poor.</p><p>The<br>clients of microfinance banks are typically self employed low income<br>entrepreneurs in both urban and rural areas, they include traders, subsistence<br>farmers, street vendors, motorcycle riders and blacksmith etc.</p><p><b>ECONOMIC GROWTH AND DEVELOPMENT:</b></p><p><b></b></p><b><p>This<br>term has generated a lot of controversies over the years. Some economics see it<br>as political and structural change while others are of the opinion that it<br>relates the progress in the basic human needs over time. Another school of<br>thought defines it as growth accomplished by changes i.e. change in structure<br>of the economic in the country’s social structure and its political structure.</p><p>Others<br>have tended to make basic human needs approach, an approach which defined<br>economic development in terms of progress toward reducing the incidence of<br>poverty, unemployment and income inequalities and for those whose living<br>standards have not been rising. This approach also seeks ways and means of<br>improving their conditions,</p><p><b>NIGERIA:</b></p><p><b></b></p><b><p>A<br>nation in the African continent and located in the western part of Africa. it<br>was colonized by the British and got its independent in 1960.</p><p><b>REFERENCE</b></p><p><b></b></p><b><p>Lemo, T (2006) Transforming the Nigerian economy through microfinance initiative<br>“national workshop on empowerment through microfinance, p.1, Calabar Nigeria.</p><p>Onyema M. E (2006), Transformation of<br>the Nigeria economy through the microfinance initiatives operators and<br>entrepreneurs perspectives pp. 1-5 Abuja Nigeria</p><p>Anyanwu C. M, 2004, Microfinance<br>institution in Nigeria, policy practice and potentials paper presented at the<br>G24 workshop on constraint in growth in sub Sharan African, November, 2004,<br>p-4, Pretoria south Africa.</p><p>Olaitian M. A (2006)<br>Finance for small and medium scale enterprises in Nigeria Journal of<br>international farm management Vol. 3 No 2 January</p></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b></b> <br><p></p>