Microfinancing in South East Nigeria, the Anambra Example
Abstract:
This paper examines the need for promoting microfinance as a social business for a poverty reduction economic strategy in Nigeria. Through the development of microfinancePolicy, Regulatory and Supervisory Framework, microfinance banks are licenced and regulated by the Central Bank of Nigeria. This paper relies on primary and secondary data from microfinance banks within Anambra State the area of the study. With the help of structured questionnaires administered,information on preferences of microfinance bank clients were obtained on Account Opening Requirements, Credit/Loan services, Saving Products and their knowledge of other financial services. The focal group discussions with customers drawn from nine sampled micro finance banks were applied to validate and collaborate these views. A multipleregression statistical tool was used for analysis. The responses within the various factor groups were tested for internal reliability using Cronbach’s Alpha test. The Principal Component Analysis (PCA) of factor analysis, with varimax rotation, was used to reduce a large number of variates.The result did support the theoretical formulation in thestudy. The paper however concludes that the government and its agencies should deliberately encourage microfinance banks to power their financial outreach. This will deepen the saving and investment culture and skills acquisition in Nigeria that will reduce the incidence of poverty in the country.Enlightment and educational campaigns programmes mounted by the regulators and the operators are needed to change the perception of the general public on the existence and contribution of MFBs to Financial Inclusion
Microfinancealso called Micro banking is a means of extending credit, usually in the form of small loans with no collateral, to non-traditional borrowers such as the poor in rural or undeveloped areas. This approach was institutionalized in 1976 by Muhammad Yunus, an American-educated Bangladeshi economist who
This paper examines the need for promoting microfinance as a social business for a poverty reduction economic strategy in Nigeria. Through the development of microfinancePolicy, Regulatory and Supervisory Framework, microfinance banks are licenced and regulated by the Central Bank of Nigeria. This paper relies on primary and secondary data from microfinance banks within Anambra State the area of the study. With the help of structured questionnaires administered,information on preferences of microfinance bank clients were obtained on Account Opening Requirements, Credit/Loan services, Saving Products and their knowledge of other financial services. The focal group discussions with customers drawn from nine sampled micro finance banks were applied to validate and collaborate these views. A multipleregression statistical tool was used for analysis. The responses within the various factor groups were tested for internal reliability using Cronbach’s Alpha test. The Principal Component Analysis (PCA) of factor analysis, with varimax rotation, was used to reduce a large number of variates.The result did support the theoretical formulation in thestudy. The paper however concludes that the government and its agencies should deliberately encourage microfinance banks to power their financial outreach. This will deepen the saving and investment culture and skills acquisition in Nigeria that will reduce the incidence of poverty in the country.Enlightment and educational campaigns programmes mounted by the regulators and the operators are needed to change the perception of the general public on the existence and contribution of MFBs to Financial Inclusion
Microfinancealso called Micro banking is a means of extending credit, usually in the form of small loans with no collateral, to non-traditional borrowers such as the poor in rural or undeveloped areas. This approach was institutionalized in 1976 by Muhammad Yunus, an American-educated Bangladeshi economist who
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